At A Glance
- The Inflation Reduction Act increases the amount and type of payroll taxes eligible for the Qualified Small Business Payroll Tax Credit for Increasing Research Activities beginning in 2023
- Creates a 15% minimum corporate income tax
- Solidifies numerous climate and healthcare provisions
What is the Inflation Reduction Act of 2022?
The United States Senate and House of Representatives recently passed the Inflation Reduction Act, containing climate, tax, and healthcare provisions intended to reduce inflation and combat climate change. Now that the president has signed the bill into law, you might be curious about how or if the Act affects you.
Inflation Reduction Act Summary
- Allocates $300 billion in deficit reduction and $369 billion in energy security and climate change programs over the next ten years
- Creates an Alternate Minimum Corporate Income Tax at a rate of 15% for companies earning $1 billion or more
- Expands the Small Business Payroll Tax Credit for Increasing Research Activities, raising the maximum credit from $250,000 to $500,000 for tax years after December 31, 2022. Businesses can then apply the credit to their Medicare and Social Security liabilities, reducing their overall tax burden.
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