An act to provide for reconciliation pursuant to title II of S. Con. Res. 14.
Aug 16, 2022
Statute: 136 Stat. 1818
Became law: Aug 16, 2022
Aug 16, 2022
Statute: 136 Stat. 1818
Became law: Aug 16, 2022
Full breakdown available
This pages provides a high-level overview of this law. For full list of provisions, line-item appropriations, and specific funding allocations, please view our detailed breakdown.
Summary
Changes tax laws for big companies, lowers drug costs for seniors, and gives money to fight climate change and improve the IRS.
What problem does this solve?
Many families faced rising costs for healthcare and energy, and there were concerns about climate change and large companies not paying enough taxes. This law lowers prescription drug prices, makes big companies pay more in taxes, and funds clean energy projects to help families and reduce the national debt.
What does this law do?
New 15% minimum tax for large corporations
Establishes a 15% alternative minimum tax on the reported profits of corporations that make over $1 billion per year.
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Providing for lower prices for certain high-priced single source drugs
Medicare can negotiate drug prices
Allows the federal government, through Medicare, to negotiate prices for a selection of high-cost prescription drugs for the first time.
Cap on drug costs for seniors
Caps the amount Medicare Part D beneficiaries have to pay for prescription drugs out-of-pocket at $2,000 per year, starting in 2025.
New rules for electric vehicle tax credits
Replaces the old electric vehicle tax credit with a new one up to $7,500, but adds rules about where the car and its battery parts are made, and limits who can get it based on income and car price.
Increased funding for the IRS
Provides about $80 billion in additional funding over ten years for the Internal Revenue Service to improve taxpayer services and tax enforcement.
Penalties for drug price hikes
Requires drug companies to pay rebates to Medicare if they increase the prices of their drugs faster than the rate of inflation.
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Appropriate cost-sharing for covered insulin products under Medicare part D
Capping insulin costs at $35 per month
Limits the monthly cost-sharing for covered insulin products to $35 for Medicare beneficiaries, starting in 2023.
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Improve affordability and reduce premium costs of health insurance for consumers
Extended help for health insurance costs
Continues the expanded financial assistance for people buying health insurance through the Affordable Care Act marketplaces until 2025.
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Extension and modification of credit for electricity produced from certain re...
More tax credits for clean electricity
Extends and modifies tax credits for producing electricity from renewable sources like solar, wind, and geothermal power.
1% tax on stock buybacks
Adds a new 1% excise tax on the value of stock that a publicly traded corporation repurchases from its shareholders.
Fee on methane pollution
Creates a charge on methane emissions from oil and gas facilities that goes above certain levels, starting in 2024.
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Residential efficiency and electrification rebates
Rebates for energy-efficient homes
Funds state programs that will give rebates to homeowners for making their homes more energy-efficient or for buying high-efficiency electric appliances.
Who does this affect?
- Medicare beneficiaries
- Large corporations
- Individuals purchasing electric vehicles or ACA health insurance
What is the real world impact?
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Lowering healthcare costs for seniors
Allows Medicare to negotiate drug prices and caps out-of-pocket costs, aiming to make prescription drugs more affordable for millions on Medicare.
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Fighting climate change
Provides billions in tax credits and funding for renewable energy, electric vehicles, and energy efficiency to reduce greenhouse gas emissions.
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Making corporations pay more taxes
Creates a 15% minimum tax for very large, profitable corporations and a new tax on stock buybacks to ensure they contribute more to federal revenue.
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Reducing the national debt
Aims to reduce the federal deficit over time by raising more money from corporate taxes than it spends on new programs and tax credits.
When does this start?
This law has many different start dates for its various parts, with most changes taking effect between 2023 and 2026.
Corporate Minimum Tax
The 15% minimum tax on large corporations applies to tax years beginning after December 31, 2022.
Stock Buyback Tax
The 1% tax on corporate stock buybacks applies to repurchases made after December 31, 2022.
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Appropriate cost-sharing for covered insulin products under Medicare part D
Medicare Insulin Cap
The $35 monthly cap on cost-sharing for insulin for Medicare beneficiaries begins on January 1, 2023.
Methane Emissions Fee
The charge on excess methane emissions from oil and gas facilities will begin for emissions reported for the 2024 calendar year.
Medicare Out-of-Pocket Cap
The $2,000 annual cap on out-of-pocket prescription drug costs for Medicare Part D beneficiaries starts on January 1, 2025.
Medicare Drug Price Negotiation
The first set of drug prices negotiated by Medicare will take effect on January 1, 2026.