By Sidney Kess
The CPA Journal
November/December 2022 Issue
The Inflation Reduction Act of 2022 (IRA; PL 117-169) was signed into law on August 16, 2022. This massive measure, which is intended to tamp down inflation and reduce the federal budget deficit, includes many tax provisions affecting individuals and businesses. Most of the provisions become effective in 2023 or later, but some will impact 2022 returns.
Tax Changes for Individuals
The changes for individuals impact healthcare and green energy.
Premium tax credit.
Individuals who purchase their health coverage from the government marketplace may qualify for a premium tax credit. The credit may be accessed on an advanced basis by applying it toward the coverage premiums. Usually, the credit may be claimed only for those with household income not exceeding 400% of the federal poverty line (FPL) in the prior year. The new law waives the 400% FPL cap through 2025; those with higher household income may still claim the credit.
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