Outlook on tax rates and policy changes

Tax rules are constantly evolving. Stay informed with our insights.

Between changing tax rates, new tax credits and incentives, legislation responding to challenging economic environments, and more, taxpayers must navigate a rapidly evolving policy landscape. While the passage of the Inflation Reduction Act (IRA) in August 2022 brought fewer tax changes than previously proposed in the Build Back Better Act (BBBA), key tax changes were retained. These changes created sweeping tax credits and incentives for the renewable energy industries, businesses supplying that industry, and businesses and individuals using energy-efficient property and vehicles. Additional tax changes impacted large and public corporations, pass-through business owners, IRS funding, and other enhancements to tax rules.

The Infrastructure Investment and Jobs Act (the Infrastructure Act) was another change for businesses and taxpayers. Passed in 2021, the Infrastructure Act provided funding for national infrastructure projects and included notable tax changes, such as the early expiration of the employee retention credit (ERC).

Curious about how current and future legislative developments will impact individual, corporate, and international tax? Our team of tax experts track the latest developments in tax policy to keep you informed. Explore more from our tax leaders.

Key tax legislation and policies affecting taxpayers

Build Back Better Act
The House passed the Build Back Better Act (BBBA) on Nov. 19, 2021, and it included some significant tax proposals — some of which made it into the IRA. The BBBA stalled in the Senate in December 2021.
Employee retention credit
The CARES Act created the employee retention credit (ERC) to assist employers affected by the COVID-19 pandemic. Eligible employers could claim this credit based on qualified wages paid between March 12, 2020 and Sept. 30, 2021. However, opportunities still exist for businesses to retroactively claim the ERC for prior calendar quarters.
Inflation Reduction Act

The Inflation Reduction Act (IRA) was signed into law on Aug. 16, 2022. The tax items in the IRA include:

  • Taxes impacting very large or publicly traded corporations, such as the book minimum tax and excise tax on corporate stock buybacks.
  • Substantial energy-related tax credits and other incentives for individuals and businesses participating in the green energy sector or using energy-efficient property and vehicles.
  • Extension of a loss rule (Section 461(l)) impacting pass-through business owners.
  • Increased IRS funding for enforcement and other actions.
  • Other enhancements to tax rules.
Infrastructure Investment and Jobs Act

The Infrastructure Investment and Jobs Act (the Infrastructure Act) was signed into law on Nov. 15, 2021. This bill provides funding for many forms of national infrastructure projects and only includes four tax changes: 

  • The early expiration of the employee retention credit.
  • Form 1099-B-style tax information reporting is extended to include cryptocurrency and other digital assets.
  • The rules extending disaster-related tax deadlines are expanded.
  • Capital contributions to public utilities from the government for certain infrastructure projects can be received tax-free.
Section 1202
Section 1202 was enacted in 1993 to encourage investment in small businesses. It allows individuals to avoid paying taxes on up to 100% of the taxable gain recognized on the sale of qualified small business corporation stock, sometimes referred to as QSBS. And even though it’s framed as a small business tax incentive, a business can be quite large and still qualify as a “small business.” While this has been in existence for many years, the current 100% gain exclusion continues to garner significant interest, especially in an era of proposals to raise the capital gain tax rate.
Section 174
One of the most significant tax changes for businesses in 2022 is a requirement that taxpayers capitalize and amortize their research and experimentation (R&E) expenses paid or incurred after Dec. 31, 2021, under Section 174. This was originally enacted as part of the Tax Cuts and Jobs Act in 2017 but had a delayed effective date.

Policy updates from our tax experts


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