President Biden recently signed the Inflation Reduction Act into law, parts of which aim to fight climate change and lower health care costs for Americans – but how will that affect us? Here is a list of items included in the legislation that could directly improve our financial slack.


1. Cheaper prescription medications for seniors: Medicare will be allowed to negotiate prescriptions with pharmaceutical companies beginning with 10 prescription drugs in 2026, and 20 by 2029. Out-of-pocket costs will be capped at $2,000 a year starting in 2025. Insulin costs for people with diabetes will max out at $35 a month.

2. Enhances subsidies extension: More than 3 million Americans will continue to benefit from subsidies that help with rising health insurance premiums that were originally scheduled to expire next year under the Affordable Care Act. They are now extended through 2025.
 

3. Rebates and tax credits for those of us switching to cleaner energy sources: Timing for rebates is still uncertain but some credits are already available.

Rebates for switching to electric appliances:

• $8,000 for a heat pump
• $1,750 for a high-efficiency, all-electric heat pump water heater
• $840 for an electric induction cooktop
• $840 for a high-efficiency, all-electric heat pump clothes dryer
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Rebates for enabling improvements to the electric panel, wiring, and home insulation:

• $4000 for upgrading breaker boxes
• $2500 for installing electric wiring
• $1600 for insulation, air sealing and ventilation upgrades

 

Tax credits for switching to electric cars:

• $7,500 credit for people who buy a new electric vehicle beginning next year.
• $4000 credit for people who buy a used electric car.

Tax credits for sustainable investments to your home and some for switching to an electric vehicle are eligible as of August 16, 2022. Timing for rebates is currently uncertain. Learn more about what vehicles are covered under the Clean Vehicle Credit and other eligibility requirements.


4. Faster tax refunds: There will be $80 billion in additional funding to the IRS over the next 10 years, which should result in better and faster customer service.

You can find more information about how this law will benefit young Americans.

Because it’s our mission to help members build and maintain financial slack, we don’t take lightly that you trust us with delivering the most accurate and relevant news to help build and maintain financial slack. Member Relationship Specialist at our Financial Health Centers are available to help you develop the best plan to help you take advantage of these programs. Visit our website if you are interested in learning more about our SustainableHome™ Financing.