The Inflation Reduction Act of 2022 (HR 5376)
15% minimum tax rate on certain corporations
The rate will apply to corporations with income over $1 billion during any year within a three year period, and certain corporations with incomes over $100 million.
Corporations may be exempted from this tax at the Secretary's discretion. The Secretary also has the discretion to alter the standards for taxation standards.
Excise tax on repurchase of corporate stock
The tax rate will be 1% of the fair market value of any stock
$79.6 billion for Internal Revenue Service (IRS) Enhancement
- $3,181,500,000 for Taxpayer Services
- $45,637,400,000 for Enforcement
- $25,326,400,000 for "Operations Support" (facilities, vehicles, printing, postage, admin)
- $4,750,700,000 for Business Systems Modernization
- $15,000,000 for a task force to design an IRS-run free "direct efile" tax return system
- $403,000,000 for expenses of the Treasury Inspector General for Tax Administration
-$104,533,803 for the Office of Tax Policy
-$153,000,000 for the United States Tax Court
-$50,000,000 for Treasury Departmental Offices
$3 billion for the establishment of a Drug Price Negotiation Program
The program's stated purpose is to empower the Secretary to negotiate "fair prices" for single source, high-priced drugs.
There shall be no administrative or judicial review of determinations of applicable drugs or determinations of maximum fair price.
$80 million for administration of Medicare Part B "Prescription Drug Inflation Rebates"
Drug manufacturers must issue rebates for Medicare part B drugs with prices increasing faster than inflation.
$80 million for administration of Medicare Part D "Prescription Drug Inflation Rebates"
$341 million for Medicare Part D drug subsidy program and benefit redesigns
A "Manufacturer Discount Program" is also to be established by the Secretary, and caps shall be established on out-of-pocket costs
$10 million for caps on monthly cost-sharing payments under prescription drug plans and MA-PD plans
Extension on moratorium on eliminating the anti-kickback statute safe harbor protection for prescription drug rebates
Coverage of adult vaccines "recommended by the Advisory Committee on Immunization Practices under Medicare Part D"
Payment for "biosimilar biological products during initial period"
Temporary increase in Medicare Part B payment for certain biosimilar biological products
Expanded eligibility for low-income Medicare Part D subsidies
Expanded Medicaid and CHIP coverage of adult vaccinations
$1.5 million for administration of cost-sharing adjustments for insulin products under Medicare Part D
Limitation of co-pay for Insulin under Medicare Part B to $35 a month
Extension of Obamacare subsidies through 2025 to households 400% above poverty line
Extension of wind, solar, geothermal credits
Credit is determined by multiplying 0.3 cents times total kilowatt hours of electricity produced. The 0.3 cents base credit is multiplied by an inflation adjustment factor, meaning that higher inflation will result in a higher total credit.
Extension of IRS code sec 48 energy credits
10-20% increase in energy credits for solar/wind projects for low-income communities
The Secretary will allocate something called "environmental solar and wind capacity", and increased credits will be given to projects that serve low-income housing.
Extension of credits for Carbon Dioxide Sequestration
Zero-emission Nuclear Power Production Credit
Credit determined by same formula and amount as "renewable" credits, also using an inflation adjustment factor
Extension of incentives for Biodiesel, Renewable Diesel, and Alternative Fuels incentives
Extension of Second Generation Biofuel Incentives and Sustainable Aviation Fuel Credits
"Clean Hydrogen" production credits
Extension and Increase of Non-business Energy Property Credits
Taxpayers will get a 30% credit on energy efficiency modifications, with the following limitations:
- Credit allowed to any taxpayer for any taxable year shall not exceed $1200
- Credit for windows shall not exceed $600
- Credit for doors shall not exceed $250 for any exterior door, $500 aggregate for all doors
- Credit for heat pumps, biomass stoves and boilers shall not exceed $2,000
Extension of Residential Clean Energy Credit
Extension, Increase, and Modification of New Energy Efficient Home Credit
Increases credits for newly manufactured homes that meet EnergyStar regulations
$7,500 tax credit for Electric Vehicles assembled in North America
The limitation on number of vehicles eligible for credit is eliminated. The income cutoff for credit is $150,000 for individuals, $225,000 for a head of household, and $300,000 for a joint return of surviving spouse.
MSRP ceilings on vehicles eligible for credit are:
- $80,000 for vans
- $80,000 for sport utility vehicles
- $80,000 for pickup trucks
- $55,000 for all other vehicles
Credit for previously owned electric/fuel cell vehicles
Credit shall be the lesser of $4,000 or 30% of the sale price of the vehicle. Income limitations are $75,000 for individuals, $112,500 for head of household, and $150,000 for joint return or surviving spouse.
Credit for commercial electric/fuel cell vehicles
Alternative Fuel Refueling Property Credit (tax break for recharging stations)
$10 billion in tax credits for the Advanced Energy Project
A program for subsidizing green energy manufacturing
Advanced Manufacturing Production Credits
Credits will be for solar/wind energy manufacturing.
For photovoltaic cells: 4 cents multiplied by capacity of cell
For photovoltaic wafers: $12 per square meter
For polymeric backsheets: 40 cents per square meter
For solar modules: 7 cents multiplied by capacity of module
For offshore wind energy vessels: 10 percent of the sales price
For wind energy components, the following factors are multiplied by the total rated capacity of the completed wind turbine:
- Blade: 2 cents; Nacelle: 5 cents; Tower: 3 cents; Offshore foundation: 2-4 cents;
For inverters, the following factors are multiplied times the capacity of the inverter:
- Central inverters: 0.25 cents; Utility inverters:1.5 cents; Commercial Inverters: 2 cents; Residential inverters: 6.5 cents; Microinverters: 11 cents
For torque tubes: 87 cents per kilogram
For wind structural fasteners (hardware): $2.28 per kilogram
For electrode active materials: 10 percent of the cost
For battery cells: $35 multiplied by the capacity of the cell
For battery modules with battery cells: $10 multiplied by the capacity of the module
For battery modules without battery cells: $45 multiplied by the capacity of the module
For applicable critical minerals: 10 percent of the cost of the mineral's production
Reinstatement of Superfund Excise Taxes on "hazardous substances" and crude oil.
The expired excise tax of 9.7 cents per barrel is reinstated and raised to 16.4 cents per barrel. Refineries must pay this tax on every barrel they receive.
"Clean Energy" Production credits
The credit for clean electricity production is determined by multiplying the kilowatt hours times the base rate, which is either 1.5 cents or 0.3 cents depending on the facility qualifications
"Clean Energy Investment" credits
The credits apply to emission-free electricity generation and storage (batteries). Rates for the credits can be 6 to 30 percent.
IRS Code Section 168 Cost recovery for battery-related facilities
"Clean Fuel" (biofuel) production credits
Credit rate for transportation fuel ranges from 20 cents to $1.00 per gallon, depending on the facility.
Credit rate for sustainable aviation fuel ranges from 35 cents to $1.75, depending on the facility.
$500 million for the Internal Revenue Service to service elective payment of credits and transfers
Permanent extension of excise tax on coal mines to fund the Black Lung Disability Trust Fund
The tax amount is $1.10 per ton of coal for underground mines, $0.55 per ton for surface mines. Tax not to exceed 4.4 percent of the price at which a ton of coal is sold by the producer.
Reinstatement of limitation rules for deduction for state /local taxes, extension of limitation on excess business losses of non-corporate taxpayers
Altered rule for determining applicable corporate status, extension of limitation on deduction for state and local taxes
$8.5 billion in additional funding for Environmental Quality Incentives Program
Under this program, the Department of Agriculture will pay farmers and ranchers to implement "climate-friendly" practices.
$50 million of the funding must prioritize projects that aim to reduce livestock flatulence.
Additional $3.25 billion for the Conservation Stewardship Program
The CRP makes multi-year contracts with farmers and ranchers to enact Department of Agriculture conservation plans on their lands.
Additional $1.4 billion for the Agricultural Conservation Easement program
This program aims to conserve wetlands, grasslands, farm and ranch land through long-term conservation easements
Additional $4.95 billion for the Regional Conservation Partnership program
This program implements partnerships with landowners to implement conservation projects
$1.3 billion for "conservation technical assistance"
Of which $1 billion shall be for conservation technical assistance through the Natural Resource Conservation Service, $300 million to carry out a program to quantify carbon sequestration, and $100 million for administrative costs
$1 billion for rural electric loans for renewable energy
$2 billion for the Rural Energy For America program
Of which, $1.7 billion will be for rural hydrogen and fuel cell projects, and $300 million will be for other "underutilized renewable energy technologies"
$500 million for biofuel infrastructure and agricultural product market expansion
$9.7 billion in USDA assistance to rural electric cooperatives tied to renewables projects and decarbonization
$100 million in additional funds for USDA administrative expenses
$3.1 billion in immediate farm loan relief for borrowers with at-risk agricultural operations
$125 million for USDA technical assistance to "underserved farmers, ranchers, and foresters"
$250 million in "Land Loss Assistance" to "underserved farmers, ranchers, and foresters"
$10 million for USDA "Equity Commissions" to address racial equity issues
$250 million for USDA Research, Education, and Extension for underrepresented groups
$2.2 billion in assistance to farmers, ranchers, or foresters who have experienced "discrimination"
$24 million for USDA administrative costs for "underserved" farmers, ranchers, and foresters programs
$2.2 billion for National Forest System Restoration and Fuels Reduction projects
-$1.8 billion for hazardous fuels reduction projects
-$200 million for vegetation management projects
-$100 million for environmental reviews
-$50 million for protection of old-growth forests
$2.2 billion for state and private forestry conservation programs
$100 million for additional UDSA forestry program administrative expenses
$500 million in additional Defense Production Act spending
$1 billion for "Improving energy efficiency or water efficiency or climate resilience of affordable housing"
$2.6 billion for NOAA "investing in coastal communities and climate resilience"
$200 million for NOAA facilities
$20 million for NOAA permitting review personnel and equipment
$150 million for NOAA weather and climate modeling
$190 million for NOAA computing capacity for weather and climate modeling
$100 million for a new NOAA hurricane hunter aircraft
$297 million for an Alternative Fuel and Low-Emission Aviation technology grant program
$4.3 billion for establishing a Home Energy Performance-based, wholesale rebates program
$4.3 billion for state energy offices to establish a high-efficiency electric home rebate program
$200 million for state-based home energy efficiency contractor training grants
$1 billion in assistance for latest and zero emission building energy code adoption
$40 billion commitment authority for DOE loans for select energy projects
The energy projects must: avoid, reduce, or sequester air pollutants or anthropogenic emissions of greenhouse gases, and employ new or significantly improved technologies as compared to commercial technologies in service in the United States at the time the guarantee is issued
$3.6 billion for costs associated with DOE loan guarantees
$3 billion for DOE advanced technology vehicle manufacturing loans
$25 million reserved for administrative costs
$2 billion for electric, hybrid, and hydrogen fuel cell vehicle manufacturing conversion grants
Increase in DOE Tribal Energy Loan guarantees from $2 billion to $20 billion
With a $75 million allocation to the Secretary of Energy for carrying out the program
$2 billion for Transmission Facility financing (direct loans)
$760 million for grants to facilitate the siting of interstate electricity transmission lines
$100 million for interregional and offshore wind electricity transmission planning, modeling, and analysis
$5.8 billion for the Office of Clean Energy Demonstrations
With $300 million reserved for administrative costs
$20 million for Department of Energy (DOE) oversight
$2 billion for the National Laboratory Infrastructure
- $1.55 billion for the Office of Science
- $150 million for the Office of Fossil Energy and Carbon management
- $150 million for the Office of Nuclear Energy
- $150 million for the Office of Energy Efficiency and Renewable Energy
$700 million for availability of high-assay low-enriched uranium
$250 million for National Park Service and Bureau of Land Management conservation and resilience projects
$500 million for hiring National Park Service Employees
$250 million for National Parks Service and Bureau of Land Management conservation, ecosystem restoration, and habitat restoration projects
$200 million for National Park System priority deferred maintenance projects
$550 million for Bureau of Reclamation domestic water supply projects
$25 million for Bureau of Reclamation canal improvement projects
$4 billion for drought mitigation projects in designated "reclamation states"
$15 million for Office of Insular Affairs Climate Change Technical Assistance
Offshore wind leasing authorization for the outer continental shelf
Offshore wind lease authorization for US territories
Increase of offshore oil and gas royalty rate from 12.5 percent to between 16.66 percent and 18.75 percent
Increase of onshore oil and gas royalty rates and minimum bids, imposition of additional fees
Onshore oil and gas royalty rate is increased from 12.5 percent to 16-2/3 percent
Minimum bid for acreage increased from $2 per acre to $10 per acre
Increase in minimum rental rates from $1.50 per acre to $3 per acre per year for 2-year period, $5 per acre per year for 6-year period, and $15 per year for 10-year period
Increase in rentals in reinstated leases late from $10 to $20 per acre
Imposition of a $5 per acre expression of interest fee
With exceptions, flared gas will be assessed for royalty payments
Authorization of certain offshore oil and gas lease sales
Limitations on granting/denying oil and gas and wind/solar leases
$23.5 million for the US Geological Survey 3D Elevation Program
$10 million for Department of Interior oversight
$115 million for hiring Department of Energy environmental review employees
$100 million for hiring Federal Energy Regulatory Commission employees
$150 million for hiring Department of Interior employees
$1 billion for a "clean" heavy duty vehicles program
$3 billion for reducing air pollution at ports
$27 billion for the "Greenhouse Gas Reduction Fund" to lower emissions in "disadvantaged communities"
$60 million for diesel emissions reductions grants
$117.5 million for fenceline air monitoring, screening air monitoring, national air toxic trend stations, and other air monitoring
$50 million for EPA multipollutant air monitoring stations
$3 million for air quality sensors in low-income and disadvantaged communities
$15 million for EPA addressing emissions from wood heaters
$20 million for EPA methane monitoring
$25 million for EPA Clean Air Act grants
$5 million for EPA grants for implementing greenhouse gas and zero-emissions standards for mobile sources
$50 million for reducing greenhouse gases at low income or disadvantaged schools
$87 million for the Low Emissions Electricity program
- $17,000,000 for consumer-related education and partnerships with respect to reductions in greenhouse gas emissions that result from domestic electricity generation and use
- $17,000,000 for education, technical assistance, and partnerships within low-income and disadvantaged communities with respect to reductions in greenhouse gas emissions that result from domestic electricity generation and use
- $17,000,000 for industry-related outreach, technical assistance, and partnerships with respect to reductions in greenhouse gas emissions that result from domestic electricity generation and use
- $17,000,000 for outreach and technical assistance to, and partnerships with, State, Tribal, and local governments with respect to reductions in greenhouse gas emissions that result from domestic electricity generation and use
- $1,000,000 to assess, not later than 1 year after the date of enactment of this section, the reductions in greenhouse gas emissions that result from changes in domestic electricity generation and use that are anticipated to occur on an annual basis through fiscal year 2031
- $18,000,000 to ensure that reductions in greenhouse gas emissions are achieved through use of the existing authorities of this Act
$15 million for Clean Air Act test and protocol development and advanced biofuels investment
$38.5 million for funding the American Innovation and Manufacturing Act of 2020 (government-allocated production of certain substances)
$25 million for EPA enforcement technology and "public information"
$5 million for EPA scrutiny of corporate climate action plans
$250 million for "environmental product declaration assistance"
A program will be established to give grants to companies who inform customers of the environmental friendliness of their products, and assist organizations that develop the climate-friendly standards
$1.5 billion for Methane mitigation and monitoring incentives (grants, rebates, contracts, loans)
Grants will be aimed at EPA methane monitoring programs, assistance for greenhouse gas reports, minimizing health effects of methane and other greenhouse gas emissions in "disadvantaged communities", and environmental restoration.
Grants may also be used for plugging and abandoning wells on non-federal land.
Imposition of $900 per metric ton fee on methane emissions in 2024, $1200 per ton in 2025, and $1500 per ton thereafter (past a designated threshold)
Fees will be applied to designated facilities that report more than 25,000 metric tons of carbon dioxide equivalent of greenhouse gases per year. Facilities include:
- Offshore and onshore natural gas production
- Onshore natural gas processing
- Onshore natural gas transmission compression
- Underground natural gas storage
- Liquefied natural gas storage
- Liquefied natural gas import and export equipment
- Onshore petroleum and natural gas gathering and boosting
- Onshore natural gas transmission pipelines
For production facilities, fees shall apply to methane emissions in excess of 0.2 percent of the natural gas sent to sale from the facility, or 10 metric tons of methane per million barrels of oil sent to sale from the facility if no natural gas sent.
For nonproduction facilities, fees shall apply to methane emissions in excess of 0.05 percent of the natural gas sent to sale from or through the facility.
For natural gas transmission facilities, fees shall apply to emissions in excess of 0.11 percent of the natural gas sent to sale from or through such facility.
$5 billion in grants for greenhouse gas air pollution planning and implementation grants
Grant applicants must outline how their plans will accommodate low-income and disadvantaged communities
$40 million for EPA permitting and environmental reviews
$100 million for the EPA to label low-carbon highway construction materials
$3 billion for "Environmental and Climate Justice" block grants
Eligible non-profits, local governments, and institutions of higher education will receive grants for:
- community-led air and other pollution monitoring, prevention, and remediation, and investments in low- and zero-emission and resilient technologies and related infrastructure and workforce development that help reduce greenhouse gas emissions and other air pollutants
- mitigating climate and health risks from urban heat islands, extreme heat, wood heater emissions, and wildfire events
- climate resiliency and adaptation
- reducing indoor toxics and indoor air pollution
- facilitating engagement of disadvantaged communities in State and Federal advisory groups, workshops, rulemakings, and other public processes
$125 million for Endangered Species Act recovery plans
$125 million for the US Fish and Wildlife Service to address weather events and invasive species
$62.5 million for the Council on Environmental Quality (for studies, training, and community engagement)
$3.16 billion for the "Neighborhood Access and Equity Grant Program"
Grants will "improve walkability, safety, and affordable transportation access" and "expand public participation in transportation planning by individuals and organizations in disadvantaged or underserved communities". $1.26 billion is reserved for "economically disadvantaged communities". Funds may not be used for "a project for additional through travel lanes for single-occupant passenger vehicles".