Energy Insider – 1st Quarter 2023

• March 30, 2023
• Category: Energy Insider

In today’s world of divided government, it is rare that major legislative acts are passed through Congress. President Biden recently signed the Inflation Reduction Act of 2022 into law. The law involves impacts on climate change, healthcare and taxation revenues. All these changes will have effects on your business. For small and large businesses alike, it’s important to appreciate what the Inflation Reduction Act of 2022 could mean.

 

 

In the area of healthcare insurance, premium subsidies for the Affordable Care Act will now extend to 2025 instead of ending this year. The law allows the government to now negotiate drug costs for its Medicare patients. It also capped out-of-pocket drug costs for Medicare patients to $2,000 a year.

 

In the area of taxation, it requires all corporations to pay a minimum 15% tax rate for revenues over $1 billion. No matter the deductions, this is the lowest rate for these companies. In essence, this tax change alone is expected to generate $300 billion in revenues yet only affect 150 companies. The law also provides $80 billion to cover the cost of IRS reinforcement.

 

And lastly, in the area of climate change, billions of dollars of subsidies and tax credits are being provided for over twenty programs that reduce greenhouse gas emissions. These credits and deductions are to provide for businesses to invest in advanced energy projects, credits for electric commercial vehicles and charging, biofuels- first and second generation, renewable energy production, and it also supports carbon capture and storage of renewable energy just to name a few.

 

The Inflation Reduction Act of 2022 will affect businesses as they make changes to policies, practices and possibly even pricing. Now is the time to prepare your business for the upcoming changes. For more details, review House Bill 5376 or contact the IRS.