U.S. President Joe Biden signed the Inflation Reduction Act of 2022 (Bill H.R. 5376) into law on 16 August 2022. The main tax provisions of the Act include:

• Establishing a 15% corporate alternative minimum tax for taxable years beginning after 31 December 2022;
• Imposing a 1% excise tax on corporate stock repurchases after 31 December 2022;
• Establishing an excise tax on drug manufacturers, producers, and importers who fail to enter into drug pricing agreements;
• Extending the health insurance premium tax credit modifications made in the American Rescue Plan Act of 2021 (ARPA; P.L. 117-2) through 2025; and
• Modifications to the tax treatment of the energy sector, including:
  • extension and modification of the credit for electricity produced from certain renewable resources through 2024;
  • extension and modification of the energy investment tax credit through 2024 in general, with a further extension through 2034 for geothermal heat pumps; and
  • extension of excise tax credits for alternative fuels, biodiesel, and renewable diesel through 2024.

The key measure is the new 15% corporate alternative minimum tax on corporations based on financial income. The main points of the tax are summarized as follows based on the latest report on the Inflation Reduction Act as published by the U.S. Congressional Research Services (CRS):

• The new alternative minimum tax applies to corporations with USD 1 billion or more in average annual earnings in the previous three years;
• In the case of U.S. corporations that have foreign parents, the tax applies only to income earned in the United States of USD 100 million or more of average annual earnings in the previous three years (and applies when the international financial reporting group has income of USD 1 billion or more);
• The tax applies to a new corporation in existence for less than three years based on the earnings in the years of existence;
• The tax applies to large private equity firms organized as partnerships, but excludes portfolio companies owned by these firms;
• The tax does not apply to Subchapter S corporations, regulated investment companies (RICs), and real estate investment trusts (REITs);
• Firms that file consolidated returns include income allocable to the firm from related firms including controlled foreign corporations (and any disregarded entities), while for other related firms, dividends are included;
• Financial income for the purpose of the tax is adjusted to allow depreciation deductions based on tax rules, including adjustments to allow recovery of wireless spectrum rights as allowed under tax rules (recovered over 15 years);
• The additional tax is equal to the amount of the minimum tax in excess of the regular income tax, plus the additional tax from the Base Erosion and Anti-Abuse (BEAT) tax;
• Financial income is increased by federal and foreign income taxes to place income on a pretax basis.
• Losses are allowed in the same manner as with the regular tax, with loss carryovers limited to 80% of taxable income;
• Domestic credits under the general business tax (such as the R&D credit) are allowed to offset up to 75% of the combined regular and minimum tax;
• Foreign tax credits are allowed based on the allowance for foreign taxes paid in a corporation's financial statement; and
• A credit for additional minimum tax could be carried over to future years to offset regular tax when that tax is higher.

The new alternative minimum tax applies to taxable years beginning after 31 December 2022.