Inflation Reduction Act

The Inflation Reduction Act of 2022 

With the passage of the Inflation Reduction Act of 2022 comes a host of significant tax law changes and provisions that will be of interest to CPAs. The bill is expected to raise $737 billion in revenue over the next decade, with a majority of revenue coming from corporate tax hikes and increased funding for IRS collection efforts. Read this CPA Now blog to learn the most relevant implications of this historic legislation.

Key Provisions in the Bill

  • 15% corporate minimum tax on financial statement income - For corporations with at least $1 billion in income, allowing for bonus and accelerated depreciation deductions when calculating taxable book income. The AICPA has expressed concerns about this tax, citing the basis of imposing tax liability on the nontax criterion of book income.
  • 1% tax on stock buybacks - This legislation imposes a new 1% tax on corporations' net repurchase of stock. The tax is expected to raise $74 million over the next decade. 
  • $80 billion in increased funding for the IRS - The bill allocates increased funding to the IRS for enforcement activities, modernization, and the hiring and training of new auditors. 
  • Reinstatement of Superfund taxes on crude oil and petroleum products.
  • Tax incentives for businesses to lower their carbon footprint - The bill includes new tax credits and incentives for sustainable energy usage. 
  • $64 billion of funding to extend the Affordable Care Act program 
  • Prescription drug pricing reforms 

Related CPE

Inflation Reduction Act of 2022: Explanation and Planning Webinar
CPE Credits: 2-Tax

Summary and Analysis of the Inflation Reduction Act of 2022 Webinar
CPE Credits: 2-Tax

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More courses will be coming soon. Plus, look for further analysis of the new law in the coming weeks from Bob Duquette, CPA, a member of PICPA's Federal Tax Thought Leadership Committee.

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