How will the Inflation Reduction Act help me?
SaverLife celebrates the passage of this historic bill, as it will go a long way in helping families nationwide. But there is still more work to do. Find out how much you can save on your energy costs with this calculator.
Why does this bill matter?
You may have heard about the Inflation Reduction Act in the news. President Biden signed this landmark bill into law on August 16, 2022. The bill will help families lower costs in many ways: reducing healthcare costs, supporting clean energy projects, reforming the IRS, and more.
It will be paid for by setting minimum taxes on large corporations. Bonus: the bill helps reduce the national deficit at the same time. Here are the top 3 ways the legislation helps you.
The Inflation Reduction Act lowers healthcare costs for families.
- Insurance premiums: 13 million Americans will continue to save an average of $800 per year on health insurance premiums. The Inflation Reduction Act extended healthcare savings until 2025 for people with insurance through the Affordable Care Act (ACA). This is big news since those savings were set to expire this year.
- Prescription drugs:
- Starting in 2023, people will see lower prices on 10 prescription drugs. And by 2029, Medicare will negotiate with drug companies to lower the cost of the 20 most expensive medications.
- Additionally, insulin has been capped at $35/month for those with Medicare.
- Starting in 2025, Medicare recipients’ out-of-pocket expenses will be capped at $2,000.
The Inflation Reduction Act also lowers household energy bills for families. Part of the $369 billion budget is for communities to fight the climate crisis. Specifically, these funds will:
- Give households $14,000 in tax rebates to buy heat pumps, solar panels, or other energy-efficient home appliances. Those rebates will help families save at least $300 per year and reduce their monthly energy bills
- Create up to 9 million new, good-paying jobs in the next decade
- Help lower transportation costs. Families could receive up to $7,500 in tax credits for new electric vehicles and $4,000 for used electric vehicles. That comes to about $950 in savings per year (PBS)
Investing in the IRS
Over the next few years, the IRS will hire 87,000 employees across various positions, such as customer service and information technology (IT). Also, the agency importantly notes that the $80 billion it receives from the bill is “not about increasing audit scrutiny on small businesses or middle-income Americans” (IRS).
At SaverLife, we’ve seen how tax credits and refunds help families pay off debt and save for the future. And we’re looking forward to seeing how the IRS makes meaningful changes to help it run smoothly.
We hope this significant investment means that phone wait times will decrease significantly, and you’ll hopefully get your tax refunds quicker.
Timeline of the legislation
Since the Biden Administration enacted the American Rescue Plan Act last spring, lawmakers have been working on another bill that could continue to help individuals and families recover from the pandemic. The Inflation Reduction Act is a slimmed-down version of the previous Build Back Better bill.
Here’s a helpful timeline of how this bill passed:
- The Senate passed this bill on August 7, 2022
- The House of Representatives passed the bill on August 12, 2022
- President Biden signed the bill on August 16, 2022
Many Inflation Reduction Act programs will start to take effect as soon as 2023. More savings are coming to families nationwide very soon.
What comes next? Where’s the Child Tax Credit?
We’ll be monitoring how this landmark legislation impacts SaverLife members, especially regarding changes in healthcare, climate change, and IRS reform. While this bill is a significant step forward in easing inflationary prices for millions, some shortcomings exist, such as the Child Tax Credit (CTC) exclusion.
We know how much the monthly payments helped families, so we’ll keep fighting to expand the CTC. Similarly, we’ll continue supporting local and national policies that provide individuals and families with investment in their long-term wealth.
Join our private Facebook Voice group to help us keep fight for the CTC or lend your voice to other social issues we’re addressing. And stay tuned because we’ll be sharing more about our SaverLife Advocacy Panelists soon.
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