What Benefits Could You Get From the Inflation Reduction Act?

Over the weekend, the United States Senate signed off on the Inflation Reduction Act after much debate about spending and provisions in the legislation. In fact, it was Vice President Kamala Harris whose vote broke the 50-50 tie in the Senate.

See: Inflation Reduction Act Offers Home Tax Credits, Rebates to Upgrade Electric and Solar Infrastructure
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President Joe Biden released a statement on Sunday, August 7 noting how the Act will put working American families front and center, alleviating some of the increased costs that have been an effect of inflation.

It now heads to the House for a final vote; if passed, Biden will then sign it into law.

Some of the key points include yearly caps on prescriptions for seniors and reduced health insurance premiums for those who have coverage through the Affordable Care Act; investments in sustainable energy to help fight the effects of climate change; and a sweeping tax reform that increases the amount of taxes paid by individuals and corporations making over $400,000 a year.

Here's a closer look at what the Inflation Reduction Act aims to tackle.

Improved Prescription Drug Prices & Reduced Health Care Premiums

The provisions of the act include caps on out-of-pocket prescription payments for anyone on Medicare, limiting the amount to $2,000 in an annual cycle by the year 2025.

Learn: How Will the Inflation Reduction Act's Tax Reform Impact You?

"In addition, it will do something that we have tried -- and failed -- to do in Washington for decades -- allow Medicare to negotiate a better deal on prescription drugs," said U.S. Department of Health and Human Services (HHS) Secretary Xavier Becerra on Aug. 7.

Climate Change Initiatives

This is the largest bill to take on these reforms in U.S. history. The act will allocate more than $360 billion towards modernization efforts, including $60 billion invested in the manufacturing and implementation of wind turbines and solar panels across the 50 states.

See: Inflation Reduction Act Seeks to Improve Prescription Drug Prices, Reduce Health Care Premiums

There will also be tax credits for families who install solar panels or buy electric cars.

Tax Reforms & Breaks

To help pay for the new provisions in the Inflation Reduction Act, the U.S. government will institute new tax structures.

Discover: Inflation Reduction Act's Climate Change Initiatives Subsidize Solar Panels, Electric Vehicles

The changes will only apply to individuals and corporations making more than $400,000 annually and will not affect lower and middle-class workers or small businesses. The new bill would also impose an excise tax equal to 1% of fair market value for stock buybacks by companies and executives.

Part of the Act is also offering additional tax credits for measures that align with the overarching themes of the legislation such as, mentioned above, breaks for families and individuals that invest in electric cars and solar energy.

This article originally appeared on GOBankingRates.com: What Benefits Could You Get From the Inflation Reduction Act?