{"id":317282,"date":"2024-09-21T17:00:37","date_gmt":"2024-09-21T17:00:37","guid":{"rendered":"https:\/\/www.techopedia.com\/?post_type=definition&#038;p=317282"},"modified":"2024-09-21T17:00:36","modified_gmt":"2024-09-21T17:00:36","slug":"inflation-reduction-act-ira","status":"publish","type":"definition","link":"https:\/\/www.techopedia.com\/definition\/inflation-reduction-act-ira","title":{"rendered":"Inflation Reduction Act (IRA)"},"content":{"rendered":"<h2><span id=\"what_is_the_inflation_reduction_act\">What is the Inflation Reduction Act?<\/span><\/h2>\n<p>The Inflation Reduction Act (IRA) is a federal law signed by President Joe Biden that had several goals, namely, to reduce the federal budget deficit, lessen the impact of <a href=\"https:\/\/www.techopedia.com\/definition\/inflation\">inflation<\/a>, increase clean energy production, and lower prescription drug prices.<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/www.techopedia.com\/wp-content\/uploads\/2024\/09\/What-is-the-Inflation-Reduction-Act-300x189.jpg\" alt=\"What is the Inflation Reduction Act\" width=\"1200\" height=\"756\" class=\"aligncenter wp-image-317314\" srcset=\"https:\/\/www.techopedia.com\/wp-content\/uploads\/2024\/09\/What-is-the-Inflation-Reduction-Act-300x189.jpg 300w, https:\/\/www.techopedia.com\/wp-content\/uploads\/2024\/09\/What-is-the-Inflation-Reduction-Act-1024x646.jpg 1024w, https:\/\/www.techopedia.com\/wp-content\/uploads\/2024\/09\/What-is-the-Inflation-Reduction-Act-768x484.jpg 768w, https:\/\/www.techopedia.com\/wp-content\/uploads\/2024\/09\/What-is-the-Inflation-Reduction-Act-1536x968.jpg 1536w, https:\/\/www.techopedia.com\/wp-content\/uploads\/2024\/09\/What-is-the-Inflation-Reduction-Act-1200x756.jpg 1200w, https:\/\/www.techopedia.com\/wp-content\/uploads\/2024\/09\/What-is-the-Inflation-Reduction-Act-1980x1248.jpg 1980w, https:\/\/www.techopedia.com\/wp-content\/uploads\/2024\/09\/What-is-the-Inflation-Reduction-Act.jpg 2048w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><\/p>\n<div class=\"su-note\"  style=\"border-color:#dddddd;border-radius:3px;-moz-border-radius:3px;-webkit-border-radius:3px;\"><div class=\"su-note-inner su-u-clearfix su-u-trim\" style=\"background-color:#f7f7f7;border-color:#ffffff;color:#333333;border-radius:3px;-moz-border-radius:3px;-webkit-border-radius:3px;\">\n<h2><span id=\"key_takeaways\">Key Takeaways<\/span><\/h2>\n<ul>\n<li>The Inflation Reduction Act was signed into law on August 16, 2022, by President Joe Biden.<\/li>\n<li>The IRA&#8217;s main stated goal was to reduce inflation, which in 2022 was running at about 8%.<\/li>\n<li>The Inflation Reduction Act authorized a total of $891 billion in spending on federal programs.<\/li>\n<li>The IRA was used to force corporations to pay their fair share in <a href=\"https:\/\/www.techopedia.com\/definition\/taxes\">taxes<\/a> and increase the IRS&#8217;s enforcement of the federal tax code on high-net-worth individuals.<\/li>\n<li>Democrats endorsed the legislation, while Republicans opposed it, citing a lack of support for traditional energy and large spending that could make inflation worse.<\/li>\n<\/ul>\n<\/div><\/div>\n<div>\n    <section class=\"toc-sticky w-100 bg-white \">\n        <div class=\"toc-sticky__container container\">\n            <div class=\"toc-sticky__open d-flex align-items-end\" data-bs-toggle=\"collapse\"\n                 aria-controls=\"multiCollapse1\"\n                 data-bs-target=\"#multiCollapse1\">\n                <button\n                        class=\"btn btn-primary collapse-action-btn p-1 rounded-circle\"\n                        type=\"button\"\n                >\n                    <i class=\"icon-chevron-up\"><\/i>\n                <\/button>\n                <span id=\"toc-current-title\" class=\"d-flex align-items-center\">\n                    Table of Contents\n                <\/span>\n                <span class=\"toc-main-title-permanent\">Table of Contents<\/span>\n            <\/div>\n            <div\n                    class=\"collapse my-3\"\n                    id=\"multiCollapse1\"\n            >\n                <ol class=\"StepProgress\">\n                                                                        <li class=\"StepProgress-item current\">\n                                                <div class=\"StepProgress-item__group\">\n                            <a data-id=\"what_is_the_inflation_reduction_act\"\n                               onclick=handleScrollToTitle(\"what_is_the_inflation_reduction_act\")\n                               class=\"StepProgress-item__link\" data-level=\"2\">What is the Inflation Reduction Act?<\/a>\n                                                    <\/div>\n                                                <\/li>\n                                                                        <li class=\"StepProgress-item\">\n                                                <div class=\"StepProgress-item__group\">\n                            <a data-id=\"key_takeaways\"\n                               onclick=handleScrollToTitle(\"key_takeaways\")\n                               class=\"StepProgress-item__link\" data-level=\"2\">Key Takeaways<\/a>\n                                                    <\/div>\n                                                <\/li>\n                                                                        <li class=\"StepProgress-item\">\n                                                <div class=\"StepProgress-item__group\">\n                            <a data-id=\"understanding_the_inflation_reduction_act\"\n                               onclick=handleScrollToTitle(\"understanding_the_inflation_reduction_act\")\n                               class=\"StepProgress-item__link\" data-level=\"2\">Understanding the Inflation Reduction Act<\/a>\n                                                    <\/div>\n                                                <\/li>\n                                                                        <li class=\"StepProgress-item\">\n                                                <div class=\"StepProgress-item__group\">\n                            <a data-id=\"how_does_the_inflation_reduction_act_affect_taxes\"\n                               onclick=handleScrollToTitle(\"how_does_the_inflation_reduction_act_affect_taxes\")\n                               class=\"StepProgress-item__link\" data-level=\"2\">How Does the Inflation Reduction Act Affect Taxes?<\/a>\n                                                    <\/div>\n                                                <\/li>\n                                                                        <li class=\"StepProgress-item\">\n                                                <div class=\"StepProgress-item__group\">\n                            <a data-id=\"enhanced_irs_tax_enforcement\"\n                               onclick=handleScrollToTitle(\"enhanced_irs_tax_enforcement\")\n                               class=\"StepProgress-item__link\" data-level=\"2\">Enhanced IRS Tax Enforcement<\/a>\n                                                    <\/div>\n                                                <\/li>\n                                                                        <li class=\"StepProgress-item\">\n                                                <div class=\"StepProgress-item__group\">\n                            <a data-id=\"ira_by_the_numbers\"\n                               onclick=handleScrollToTitle(\"ira_by_the_numbers\")\n                               class=\"StepProgress-item__link\" data-level=\"2\">IRA By The Numbers<\/a>\n                                                    <\/div>\n                                                <\/li>\n                                                                        <li class=\"StepProgress-item\">\n                                                <div class=\"StepProgress-item__group\">\n                            <a data-id=\"inflation_reduction_act_controversies\"\n                               onclick=handleScrollToTitle(\"inflation_reduction_act_controversies\")\n                               class=\"StepProgress-item__link\" data-level=\"2\">Inflation Reduction Act Controversies<\/a>\n                                                    <\/div>\n                                                <\/li>\n                                                                        <li class=\"StepProgress-item\">\n                                                <div class=\"StepProgress-item__group\">\n                            <a data-id=\"the_bottom_line\"\n                               onclick=handleScrollToTitle(\"the_bottom_line\")\n                               class=\"StepProgress-item__link\" data-level=\"2\">The Bottom Line<\/a>\n                                                    <\/div>\n                                                <\/li>\n                                                                        <li class=\"StepProgress-item\">\n                                                <div class=\"StepProgress-item__group\">\n                            <a data-id=\"faqs\"\n                               onclick=handleScrollToTitle(\"faqs\")\n                               class=\"StepProgress-item__link\" data-level=\"2\">FAQs<\/a>\n                                                    <\/div>\n                                                <\/li>\n                                                                        <li class=\"StepProgress-item\">\n                                                <div class=\"StepProgress-item__group\">\n                            <a data-id=\"references\"\n                               onclick=handleScrollToTitle(\"references\")\n                               class=\"StepProgress-item__link\" data-level=\"2\">References<\/a>\n                                                    <\/div>\n                                                <\/li>\n                                    <\/ol>\n                <div class=\"toc-sticky__container__disperse\"><\/div>\n                <div class=\"toc-sticky__btn-top justify-content-center\">\n                    <button class=\"btn btn-link d-flex align-items-center\" onclick={btnTop()}><p>Show Full Guide<\/p><img decoding=\"async\"\n                                src=\"\/wp-content\/plugins\/table-of-contents\/assets\/images\/arrow-up-circle.svg\"\n                                alt=\"arrow-up-circle\">\n                    <\/button>\n                <\/div>\n            <\/div>\n        <\/div>\n    <\/section>\n    <div class=\"toc-sticky-list\">\n        <div class=\"toc-sticky__container container\">\n            <div class=\"toc-sticky__open d-flex align-items-end\" data-bs-toggle=\"collapse\" aria-controls=\"multiCollapse2\" data-bs-target=\"#multiCollapse2\">\n                <button class=\"btn btn-primary collapse-action-btn p-1 rounded-circle\"\n                        type=\"button\">\n                    <i class=\"icon-chevron-up up\"><\/i>\n                <\/button>\n                <span id=\"toc-current-title\" class=\"d-flex align-items-center\">\n                    Table of Contents\n                <\/span>\n            <\/div>\n            <div  class=\"collapse my-3\" id=\"multiCollapse2\">\n                <ol class=\"StepProgress\">\n                    \t\t\t\t\t \t\t\t\t\t                                                     <li class=\"StepProgress-item current \">\n                                                    <div class=\"StepProgress-item__group\">\n                                <a data-id=\"what_is_the_inflation_reduction_act\"\n                                   onclick=handleScrollToTitle(\"what_is_the_inflation_reduction_act\")\n                                   class=\"StepProgress-item__link\"\n                                   data-level=\"2\">What is the Inflation Reduction Act?<\/a>\n                                                            <\/div>\n                                                    <\/li>\n                    \t\t\t\t\t \t\t\t\t\t                                                     <li class=\"StepProgress-item \">\n                                                    <div class=\"StepProgress-item__group\">\n                                <a data-id=\"key_takeaways\"\n                                   onclick=handleScrollToTitle(\"key_takeaways\")\n                                   class=\"StepProgress-item__link\"\n                                   data-level=\"2\">Key Takeaways<\/a>\n                                                            <\/div>\n                                                    <\/li>\n                    \t\t\t\t\t \t\t\t\t\t                                                     <li class=\"StepProgress-item \">\n                                                    <div class=\"StepProgress-item__group\">\n                                <a data-id=\"understanding_the_inflation_reduction_act\"\n                                   onclick=handleScrollToTitle(\"understanding_the_inflation_reduction_act\")\n                                   class=\"StepProgress-item__link\"\n                                   data-level=\"2\">Understanding the Inflation Reduction Act<\/a>\n                                                            <\/div>\n                                                    <\/li>\n                    \t\t\t\t\t \t\t\t\t\t\n\t\t\t\t\t\t <span class=\"show_moretoc\">Show Full Guide<\/span>\n\t\t\t\t\t\t \t\t\t\t\t \t\t\t\t\t\t  \t\t\t\t\t                                                      <li class=\"StepProgress-item ms_hidetoc\">\n                                                    <div class=\"StepProgress-item__group\">\n                                <a data-id=\"how_does_the_inflation_reduction_act_affect_taxes\"\n                                   onclick=handleScrollToTitle(\"how_does_the_inflation_reduction_act_affect_taxes\")\n                                   class=\"StepProgress-item__link\"\n                                   data-level=\"2\">How Does the Inflation Reduction Act Affect Taxes?<\/a>\n                                                            <\/div>\n                                                    <\/li>\n                    \t\t\t\t\t \t\t\t\t\t \t\t\t\t\t\t  \t\t\t\t\t                                                      <li class=\"StepProgress-item ms_hidetoc\">\n                                                    <div class=\"StepProgress-item__group\">\n                                <a data-id=\"enhanced_irs_tax_enforcement\"\n                                   onclick=handleScrollToTitle(\"enhanced_irs_tax_enforcement\")\n                                   class=\"StepProgress-item__link\"\n                                   data-level=\"2\">Enhanced IRS Tax Enforcement<\/a>\n                                                            <\/div>\n                                                    <\/li>\n                    \t\t\t\t\t \t\t\t\t\t \t\t\t\t\t\t  \t\t\t\t\t                                                      <li class=\"StepProgress-item ms_hidetoc\">\n                                                    <div class=\"StepProgress-item__group\">\n                                <a data-id=\"ira_by_the_numbers\"\n                                   onclick=handleScrollToTitle(\"ira_by_the_numbers\")\n                                   class=\"StepProgress-item__link\"\n                                   data-level=\"2\">IRA By The Numbers<\/a>\n                                                            <\/div>\n                                                    <\/li>\n                    \t\t\t\t\t \t\t\t\t\t \t\t\t\t\t\t  \t\t\t\t\t                                                      <li class=\"StepProgress-item ms_hidetoc\">\n                                                    <div class=\"StepProgress-item__group\">\n                                <a data-id=\"inflation_reduction_act_controversies\"\n                                   onclick=handleScrollToTitle(\"inflation_reduction_act_controversies\")\n                                   class=\"StepProgress-item__link\"\n                                   data-level=\"2\">Inflation Reduction Act Controversies<\/a>\n                                                            <\/div>\n                                                    <\/li>\n                    \t\t\t\t\t \t\t\t\t\t \t\t\t\t\t\t  \t\t\t\t\t                                                      <li class=\"StepProgress-item ms_hidetoc\">\n                                                    <div class=\"StepProgress-item__group\">\n                                <a data-id=\"the_bottom_line\"\n                                   onclick=handleScrollToTitle(\"the_bottom_line\")\n                                   class=\"StepProgress-item__link\"\n                                   data-level=\"2\">The Bottom Line<\/a>\n                                                            <\/div>\n                                                    <\/li>\n                    \t\t\t\t\t \t\t\t\t\t \t\t\t\t\t\t  \t\t\t\t\t                                                      <li class=\"StepProgress-item ms_hidetoc\">\n                                                    <div class=\"StepProgress-item__group\">\n                                <a data-id=\"faqs\"\n                                   onclick=handleScrollToTitle(\"faqs\")\n                                   class=\"StepProgress-item__link\"\n                                   data-level=\"2\">FAQs<\/a>\n             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https:\/\/stackoverflow.com\/questions\/17893771\/javascript-sticky-div-after-scroll\n         *\/\n        (function (header, pageLegendCollapse) {\n            \/\/ set everything outside the onscroll event (less work per scroll)\n            const target = document.querySelector(\".toc-sticky\");\n            const targetListStatic = document.querySelector(\".toc-sticky-list\");\n\n            if (!target || !header) return;\n\n            const headerHeight = header.getBoundingClientRect().height;\n            const targetHeight = targetListStatic.getBoundingClientRect().height;\n\n            \/\/ -headerHeight so it won't be jumpy\n            const stop = targetListStatic.offsetTop + headerHeight + targetHeight;\n            const docBody =\n                document.documentElement || document.body.parentNode || document.body;\n            const hasOffset = window.pageYOffset !== undefined;\n\n            const applySticky = function () {\n                \/\/ cross-browser compatible scrollTop.\n                const scrollTop = hasOffset ? window.pageYOffset : docBody.scrollTop;\n\n                \/\/ if user scrolls to headerHeight from the top of the target div\n                if (scrollTop >= stop) {\n                    pageLegendCollapse.hide();\n                    \/\/ stick the div\n                    target.classList.add(\"sticky\");\n                    \/\/target.style.marginTop = `${headerHeight}px`;\n                } else {\n                    pageLegendCollapse.show();\n                    \/\/ release the div\n                    target.classList.remove(\"sticky\");\n                    target.style.marginTop = \"\";\n                }\n            }\n\n            applySticky();\n\n            window.addEventListener('scroll', applySticky);\n        })(header, pageLegendCollapse);\n\tjQuery('span.show_moretoc').click(function(){\n\t\tjQuery('span.show_moretoc').hide();\n\t   jQuery('.ms_hidetoc').show();\n\t});\n    });\n\n    \/\/ When the user clicks on the button, scroll to the top of the document\n    function btnTop() {\n        const pageLegend = document.querySelector('#multiCollapse1');\n        document.querySelector('html').classList.remove('overflow-hidden');\n        pageLegend.classList.remove('overflow-auto');\n        pageLegend.style.height = 'auto';\n        window.scrollTo({\n            top: 0,\n            behavior: 'smooth'\n        });\n    }\n\n    const handleScrollToTitle = (id) => {\n        const el = document.getElementById(id);\n        const headerHeightDifference = window.innerWidth < 992 ? -30 : -15;\n        window.scrollTo({\n            top: el.offsetTop - 60 - headerHeightDifference - 10,\n        });\n    }\n<\/script>\n\n<h2><span id=\"understanding_the_inflation_reduction_act\">Understanding the Inflation Reduction Act<\/span><\/h2>\n<p>Here are the most important aspects of the <a href=\"https:\/\/www.whitehouse.gov\/cleanenergy\/inflation-reduction-act-guidebook\/\" target=\"_blank\">Inflation Reduction Act<\/a>:<\/p>\n<div class=\"su-accordion su-u-trim\">\n<div class=\"su-spoiler su-spoiler-style-fancy su-spoiler-icon-plus\" data-scroll-offset=\"0\" data-anchor-in-url=\"no\"><div class=\"su-spoiler-title\" tabindex=\"0\" role=\"button\"><span class=\"su-spoiler-icon\"><\/span><strong>Federal deficit reduction<\/strong><\/div><div class=\"su-spoiler-content su-u-clearfix su-u-trim\"> Increased tax revenue and improved the enforcement of the tax code to help cut the deficit by $300 billion over the next decade. <\/div><\/div>\n<div class=\"su-spoiler su-spoiler-style-fancy su-spoiler-icon-plus su-spoiler-closed\" data-scroll-offset=\"0\" data-anchor-in-url=\"no\"><div class=\"su-spoiler-title\" tabindex=\"0\" role=\"button\"><span class=\"su-spoiler-icon\"><\/span><strong>Clean energy<\/strong><\/div><div class=\"su-spoiler-content su-u-clearfix su-u-trim\"> $369 billion earmarked for renewable energy projects and energy-efficient technology. <\/div><\/div>\n<div class=\"su-spoiler su-spoiler-style-fancy su-spoiler-icon-plus su-spoiler-closed\" data-scroll-offset=\"0\" data-anchor-in-url=\"no\"><div class=\"su-spoiler-title\" tabindex=\"0\" role=\"button\"><span class=\"su-spoiler-icon\"><\/span><strong>Prescription drug pricing reform<\/strong><\/div><div class=\"su-spoiler-content su-u-clearfix su-u-trim\"> Gave Medicare the power to negotiate prices for certain prescription drugs. <\/div><\/div>\n<div class=\"su-spoiler su-spoiler-style-fancy su-spoiler-icon-plus su-spoiler-closed\" data-scroll-offset=\"0\" data-anchor-in-url=\"no\"><div class=\"su-spoiler-title\" tabindex=\"0\" role=\"button\"><span class=\"su-spoiler-icon\"><\/span><strong>Health insurance subsidies<\/strong><\/div><div class=\"su-spoiler-content su-u-clearfix su-u-trim\"> Extends the Affordable Care Act subsidies through 2025. <\/div><\/div>\n<div class=\"su-spoiler su-spoiler-style-fancy su-spoiler-icon-plus su-spoiler-closed\" data-scroll-offset=\"0\" data-anchor-in-url=\"no\"><div class=\"su-spoiler-title\" tabindex=\"0\" role=\"button\"><span class=\"su-spoiler-icon\"><\/span><strong>Closing corporate tax loopholes<\/strong><\/div><div class=\"su-spoiler-content su-u-clearfix su-u-trim\"> Set a 15% minimum tax on corporations with more than $1 billion in profits. <\/div><\/div>\n<\/div>\n<h3>Why Is It Called The Inflation Reduction Act?<\/h3>\n<p>The Inflation Reduction Act was named for its <strong>main goal of reducing inflation, which was running rampant in 2021 and 2022<\/strong>. At the time, the COVID-19 pandemic created supply chain disruptions that led to a shortage of goods throughout the world. This quickly drove up prices as there was not enough <a href=\"https:\/\/www.techopedia.com\/definition\/supply-and-demand\">supply<\/a> to match global demand for consumer goods.<\/p>\n<p>At the same time, once pandemic lockdowns ended, consumers began spending money at a record rate. This pent-up demand for things like dining, travel, and entertainment caused prices to rise as well.<\/p>\n<p>When it appeared that inflation was coming in at double-digit numbers, the Inflation Reduction Act was enacted in an attempt to slow down this negative barrier on the economy.<\/p>\n<h2><span id=\"how_does_the_inflation_reduction_act_affect_taxes\">How Does the Inflation Reduction Act Affect Taxes?<\/span><\/h2>\n<div class=\"su-accordion su-u-trim\">\n<div class=\"su-spoiler su-spoiler-style-fancy su-spoiler-icon-plus\" data-scroll-offset=\"0\" data-anchor-in-url=\"no\"><div class=\"su-spoiler-title\" tabindex=\"0\" role=\"button\"><span class=\"su-spoiler-icon\"><\/span><strong>Corporate Minimum Tax<\/strong><\/div><div class=\"su-spoiler-content su-u-clearfix su-u-trim\">\n<p>15% minimum corporate tax.<\/p>\n<p><i>Who is affected?<\/i><\/p>\n<p>Corporations with profits greater than $1 billion.<\/p>\n<\/div><\/div>\n<div class=\"su-spoiler su-spoiler-style-fancy su-spoiler-icon-plus su-spoiler-closed\" data-scroll-offset=\"0\" data-anchor-in-url=\"no\"><div class=\"su-spoiler-title\" tabindex=\"0\" role=\"button\"><span class=\"su-spoiler-icon\"><\/span><strong>Stock Buyback Tax<\/strong><\/div><div class=\"su-spoiler-content su-u-clearfix su-u-trim\">\n<p>1% excise tax on corporate <a href=\"https:\/\/www.techopedia.com\/definition\/stock-buyback\">stock buybacks<\/a><strong>.<\/strong><\/p>\n<p><i>Who is affected?<\/i><\/p>\n<p>Companies repurchasing their own shares.<\/p>\n<\/div><\/div>\n<div class=\"su-spoiler su-spoiler-style-fancy su-spoiler-icon-plus su-spoiler-closed\" data-scroll-offset=\"0\" data-anchor-in-url=\"no\"><div class=\"su-spoiler-title\" tabindex=\"0\" role=\"button\"><span class=\"su-spoiler-icon\"><\/span><strong>Clean Energy Tax Credits<\/strong><\/div><div class=\"su-spoiler-content su-u-clearfix su-u-trim\">\n<p>Increases credits for investment in renewable energy.<\/p>\n<p><i>Who is affected?<\/i><\/p>\n<p>Businesses and individuals investing in wind, solar, etc.<\/p>\n<\/div><\/div>\n<div class=\"su-spoiler su-spoiler-style-fancy su-spoiler-icon-plus su-spoiler-closed\" data-scroll-offset=\"0\" data-anchor-in-url=\"no\"><div class=\"su-spoiler-title\" tabindex=\"0\" role=\"button\"><span class=\"su-spoiler-icon\"><\/span><strong>Energy Efficiency Tax Credits<\/strong><\/div><div class=\"su-spoiler-content su-u-clearfix su-u-trim\">\n<p>Tax credits for insulation, heat pumps, solar panels, and other efficiency upgrades.<\/p>\n<p><i>Who is affected?<\/i><\/p>\n<p>Homeowners making energy efficiency upgrades.<\/p>\n<\/div><\/div>\n<div class=\"su-spoiler su-spoiler-style-fancy su-spoiler-icon-plus su-spoiler-closed\" data-scroll-offset=\"0\" data-anchor-in-url=\"no\"><div class=\"su-spoiler-title\" tabindex=\"0\" role=\"button\"><span class=\"su-spoiler-icon\"><\/span><strong>Affordable Care Act Extension<\/strong><\/div><div class=\"su-spoiler-content su-u-clearfix su-u-trim\">\n<p>Extends ACA tax credits.<\/p>\n<p><i>Who is affected?<\/i><\/p>\n<p>Low and middle income families who use the ACA marketplace for health insurance.<\/p>\n<\/div><\/div>\n<\/div>\n<h2><span id=\"enhanced_irs_tax_enforcement\">Enhanced IRS Tax Enforcement<\/span><\/h2>\n<p>One of the main tenets of the IRA was to increase enforcement of the country&#8217;s tax code. To do so, President Biden allocated $80 billion in funding to the <a href=\"https:\/\/www.techopedia.com\/definition\/internal-revenue-service-irs\">Internal Revenue Service<\/a> (IRS) over a 10 year period.<\/p>\n<p>This money is designed to increase the IRS&#8217;s capabilities in handling audits and tax compliance issues, namely:<\/p>\n<ul>\n<li><strong>Increased staff: <\/strong>Hiring more agents specializing in auditing corporations and high-net-worth individuals.<\/li>\n<li><strong>Improving taxpayer services: <\/strong>Making it easier for all Americans to file their tax returns and receive timely responses to inquiries.<\/li>\n<li><strong>Technological improvements: <\/strong>Upgrade outdated IRS technology and systems.<\/li>\n<\/ul>\n<p>The Inflation Reduction Act relies on the Congressional Budget Office (CBO) to project how changes to the tax law and increased enforcement will impact the federal budget over time.<\/p>\n<h2><span id=\"ira_by_the_numbers\">IRA By The Numbers<\/span><\/h2>\n<ul>\n<li><a href=\"https:\/\/home.treasury.gov\/news\/featured-stories\/the-inflation-reduction-acts-benefits-and-costs\" target=\"_blank\"><strong>$800+ billion <\/strong>in federal spending<\/a>.<\/li>\n<li><strong>$369 billion <\/strong>investment in clean energy.<\/li>\n<li><strong>$80 billion <\/strong>in funding for the IRS.<\/li>\n<li><strong>$35 billion <\/strong>in projected savings for Medicare.<\/li>\n<li><strong>30% <\/strong>tax credit for installation of renewable energy projects.<\/li>\n<li><strong>15% <\/strong>minimum tax rate on corporations with over $1 billion in profits.<\/li>\n<li><strong>1% <\/strong>excise tax on corporate stock buybacks.<\/li>\n<\/ul>\n<h2><span id=\"inflation_reduction_act_controversies\">Inflation Reduction Act Controversies<\/span><\/h2>\n<p>While the policies in the IRA have been seen as positive by many, there are still those who oppose its adoption and <strong>believe it will ultimately harm the domestic economy<\/strong>.<\/p>\n<p>Detractors of the Inflation Reduction Act claim that it will:<\/p>\n<ul>\n<li>Make inflation worse by increasing the US money supply.<\/li>\n<li>Increase the federal deficit, which is already out of control.<\/li>\n<li>Discourage investment by corporations by increasing their taxes.<\/li>\n<li>Harm the fossil fuel industry, leading to job loss and higher energy costs<\/li>\n<\/ul>\n<h2><span id=\"the_bottom_line\">The Bottom Line<\/span><\/h2>\n<p>According to many, the Inflation Reduction Act was a necessary piece of legislation that helped the United States come out of the COVID-19 pandemic with a stronger economy. And according to the<br \/>\nInflation Reduction Act&#8217;s definition, it has done significant work in clean energy, affordable prescription medications, and increasing tax revenue.<\/p>\n<p>However, it will take many years, if not a decade for these changes to fully take effect, and to see whether their intended positive outcomes come to fruition.<\/p>\n<h2><span id=\"faqs\">FAQs<\/span><\/h2>\n<div class=\"man_faq_sec\" itemscope itemtype=\"https:\/\/schema.org\/FAQPage\"><\/time><section class=\"ms_faq ms_card \" ><div itemscope itemprop=\"mainEntity\" itemtype=\"https:\/\/schema.org\/Question\"><div class=\"accordionButton\"><h3 itemprop=\"name\">What is the Inflation Reduction Act in simple terms?<\/h3> <\/div>\n<div class=\"accordionContent\" itemscope itemprop=\"acceptedAnswer\" itemtype=\"https:\/\/schema.org\/Answer\" style=\"display:none;\"><p itemprop=\"text\">The Inflation Reduction Act was a 2022 law that helped address clean energy, health care, taxes, and inflation, all important issues at the time of its passing. The Inflation Reduction Act&#8217;s meaning points at its intention of reducing inflation that was running high prior to the bill&#8217;s passing.<\/p>\r\n                <\/div><\/div><\/section>\n<section class=\"ms_faq ms_card \" ><div itemscope itemprop=\"mainEntity\" itemtype=\"https:\/\/schema.org\/Question\"><div class=\"accordionButton\"><h3 itemprop=\"name\">How do you qualify for the Inflation Reduction Act rebate?<\/h3> <\/div>\n<div class=\"accordionContent\" itemscope itemprop=\"acceptedAnswer\" itemtype=\"https:\/\/schema.org\/Answer\" style=\"display:none;\"><p itemprop=\"text\">IRA tax rebates for individuals include households making energy efficiency upgrades, the purchase of an electric vehicle, installation of solar panels or wind turbines, and other income-based credits. Tax credits can be claimed when filing your income taxes for the year, while rebates must be applied to through a state or local energy program.<\/p>\r\n                <\/div><\/div><\/section>\n<section class=\"ms_faq ms_card \" ><div itemscope itemprop=\"mainEntity\" itemtype=\"https:\/\/schema.org\/Question\"><div class=\"accordionButton\"><h3 itemprop=\"name\">Does the Inflation Reduction Act give you money?<\/h3> <\/div>\n<div class=\"accordionContent\" itemscope itemprop=\"acceptedAnswer\" itemtype=\"https:\/\/schema.org\/Answer\" style=\"display:none;\"><p itemprop=\"text\">No, you do not directly receive money from the IRA. Instead, you can receive tax credits or rebates depending on your household income or adherence to energy efficiency practices throughout the year.<\/p>\r\n                <\/div><\/div><\/section>\n<section class=\"ms_faq ms_card \" ><div itemscope itemprop=\"mainEntity\" itemtype=\"https:\/\/schema.org\/Question\"><div class=\"accordionButton\"><h3 itemprop=\"name\">What is the Inflation Reduction Act 2024?<\/h3> <\/div>\n<div class=\"accordionContent\" itemscope itemprop=\"acceptedAnswer\" itemtype=\"https:\/\/schema.org\/Answer\" style=\"display:none;\"><p itemprop=\"text\">This refers to the implementation of the original IRA bill passed in 2022. <a href=\"https:\/\/www.irs.gov\/credits-deductions\/credits-for-new-clean-vehicles-purchased-in-2023-or-after\" target=\"_blank\">In 2024, a tax credit of $7,500 is being offered for purchases of new electric vehicles<\/a> (and $4,000 for used EVs), a 30% tax credit for the installation of renewable energy systems, and will cap drug costs for Medicare beneficiaries to $2,000 per year.<\/p>\r\n                <\/div><\/div><\/section>\n<section class=\"ms_faq ms_card \" ><div itemscope itemprop=\"mainEntity\" itemtype=\"https:\/\/schema.org\/Question\"><div class=\"accordionButton\"><h3 itemprop=\"name\">What Are the Tax Consequences of the Inflation Reduction Act of 2022?<\/h3> <\/div>\n<div class=\"accordionContent\" itemscope itemprop=\"acceptedAnswer\" itemtype=\"https:\/\/schema.org\/Answer\" style=\"display:none;\"><p itemprop=\"text\">The IRA has many tax consequences, including a 15% minimum tax on large corporations, 1% excise tax on stock buybacks, and $80 billion in funding to the IRS for enforcement of the federal tax code.<\/p>\r\n                <\/div><\/div><\/section>\n<section class=\"ms_faq ms_card \" ><div itemscope itemprop=\"mainEntity\" itemtype=\"https:\/\/schema.org\/Question\"><div class=\"accordionButton\"><h3 itemprop=\"name\">Who created the Inflation Reduction Act?<\/h3> <\/div>\n<div class=\"accordionContent\" itemscope itemprop=\"acceptedAnswer\" itemtype=\"https:\/\/schema.org\/Answer\" style=\"display:none;\"><p itemprop=\"text\">The Inflation Reduction Act was a bipartisan agreement spearheaded by Democratic party leaders like President Joe Biden, Senators Chuck Schumer and Joe Manchin, and House Speaker Nancy Pelosi.<\/p>\r\n                <\/div><\/div><\/section>\n<div class=\"reference-content\">\n<div class=\"reference-heading reference-content-collapsible-heading\">\n<h2><span id=\"references\">References<\/span><\/h2>\n<\/div>\n<div class=\"reference-content-body\">\n<ol>\n<li><a href=\"https:\/\/www.whitehouse.gov\/cleanenergy\/inflation-reduction-act-guidebook\/\" target=\"_blank\">Inflation Reduction Act Guidebook<\/a> (White House)<\/li>\n<li><a href=\"https:\/\/home.treasury.gov\/news\/featured-stories\/the-inflation-reduction-acts-benefits-and-costs\" target=\"_blank\">The Inflation Reduction Act&#8217;s Benefits and Costs | U.S. Department of the Treasury<\/a> (Home.treasury)<\/li>\n<li><a href=\"https:\/\/www.irs.gov\/credits-deductions\/credits-for-new-clean-vehicles-purchased-in-2023-or-after\" target=\"_blank\">Credits for new clean vehicles purchased in 2023 or after<\/a> (Irs)<\/li>\n<\/ol>\n<\/div>\n<\/div>\n<\/div>","protected":false},"excerpt":{"rendered":"<p>What is the Inflation Reduction Act? The Inflation Reduction Act (IRA) is a federal law signed by President Joe Biden that had several goals, namely, to reduce the federal budget deficit, lessen the impact of inflation, increase clean energy production, and lower prescription drug prices. Understanding the Inflation Reduction Act Here are the most important [&hellip;]<\/p>\n","protected":false},"author":287067,"featured_media":317317,"comment_status":"open","ping_status":"closed","template":"","format":"standard","meta":{"_acf_changed":false,"_lmt_disableupdate":"","_lmt_disable":"","om_disable_all_campaigns":false,"footnotes":""},"definitioncat":[2686],"class_list":["post-317282","definition","type-definition","status-publish","format-standard","has-post-thumbnail","hentry","definitioncat-economics"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.2 (Yoast SEO v24.5) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>What is the Inflation Reduction Act? 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