Yes, the Inflation Reduction Act is still in effect as law, but much of what made headlines for households in 2022 is gone. The One Big Beautiful Bill Act, signed on July 4, 2025, terminated the electric vehicle credits and the residential energy credits on staggered 2025 cutoff dates.1Internal Revenue Service. One, Big, Beautiful Bill Provisions What remains, and what will actually shape your costs in 2026, is the Medicare side of the law along with the corporate taxes it created.
What Survived and What Was Repealed
The repeals are specific and dated. The new clean vehicle credit, the used clean vehicle credit, and the commercial clean vehicle credit ended for vehicles acquired after September 30, 2025.1Internal Revenue Service. One, Big, Beautiful Bill Provisions The Energy Efficient Home Improvement Credit and the Residential Clean Energy Credit expired for property placed in service after December 31, 2025.2Internal Revenue Service. FAQs for Modification of Sections 25C, 25D, 25E, 30C, 30D, 45L, 45W, and 179D Under Public Law 119-21 Nothing new qualifies after those dates.
Still active in 2026: Medicare drug price negotiation, the annual Part D out-of-pocket cap, the $35 monthly insulin cap, the Part D premium stabilization rule, manufacturer inflation rebates, the 15% corporate alternative minimum tax, the 1% stock buyback excise tax, and the remaining portion of the IRS funding package. These are the pieces of the law that will touch you or the companies you deal with this year.
Medicare Drug Price Negotiation Takes Effect
The Department of Health and Human Services can now negotiate prices directly with drug manufacturers for high-cost medications covered under Medicare. The program focuses on single-source drugs that account for a large share of federal spending and have been on the market long enough that competition should exist but doesn’t.3U.S. Department of Health and Human Services. Inflation Reduction Act Research Series: Understanding Development and Trends in Utilization and Spending for Drugs Selected Under the Medicare Drug Price Negotiation Program
Negotiated prices for the first ten drugs took effect on January 1, 2026. The list covers Eliquis, Jardiance, Xarelto, Januvia, Farxiga, Entresto, Enbrel, Imbruvica, Stelara, and the insulins NovoLog and Fiasp.4Centers for Medicare & Medicaid Services. Selected Drugs and Negotiated Prices If you fill any of these through a Medicare plan, the price at the pharmacy counter should reflect the lower negotiated rate this year. Additional drugs are scheduled to enter the program in later rounds.
The Part D Out-of-Pocket Cap and Insulin Price
Medicare beneficiaries pay no more than $35 per month for covered insulin under both Part B and Part D.5Medicare.gov. Insulin The cap applies whether or not you qualify for Extra Help.
The annual ceiling on total out-of-pocket prescription spending under Part D started at $2,000 in 2025 and is $2,100 for 2026, adjusted upward based on average drug expenditures.6Centers for Medicare & Medicaid Services. Final CY 2026 Part D Redesign Program Instructions Once you hit that number in a calendar year, your plan covers the rest of your covered drug costs with no further copays or coinsurance. If you take multiple expensive prescriptions for a chronic condition, this is the single most consequential protection the law still delivers.
Premiums have a guardrail too. The IRA caps year-over-year increases in the national base beneficiary premium at 6% through 2029.7Centers for Medicare & Medicaid Services. 2026 Medicare Part D Bid Information and Part D Premium Stabilization Demonstration Parameters That prevents a single expensive new drug or a bad plan year from producing an unpredictable premium spike.
Manufacturer Inflation Rebates
Drug companies that raise Medicare prices faster than general inflation must pay per-unit rebates back to the federal government. The Consumer Price Index sets the benchmark for each covered drug, and any price increase above that benchmark triggers the rebate.8eCFR. 42 CFR Part 428 – Medicare Part D Drug Inflation Rebate The rule has applied to periods beginning October 1, 2022, so several years of pricing data are already covered.
Manufacturers can still raise prices; doing so faster than inflation just costs them money. For beneficiaries, the practical effect is slower price growth across the Medicare drug formulary, including drugs that have not been selected for direct negotiation.
Corporate Alternative Minimum Tax
Corporations reporting average annual adjusted financial statement income above $1 billion owe a 15% minimum tax on that income. The provision targets the gap between what large companies report as profit to shareholders and what they actually pay after credits and deductions.9Internal Revenue Service. IRS Clarifies Rules for Corporate Alternative Minimum Tax It has been in effect for taxable years beginning after December 31, 2022.
A safe harbor keeps smaller companies out. Corporations with average annual adjusted financial statement income under $500 million for the three preceding tax years generally do not have to pay the tax or file the associated form.10Internal Revenue Service. Small Corporate Taxpayers Who Reported Corporate Alternative Minimum Tax for Tax Year 2023
Stock Buyback Excise Tax
A domestic corporation whose stock trades on an established securities market owes a 1% excise tax on the fair market value of its own stock repurchased during the tax year.11Office of the Law Revision Counsel. 26 USC 4501 – Repurchase of Corporate Stock Buybacks completed after December 31, 2022 are covered. The taxable amount is reduced by the fair market value of new stock the company issues in the same year, including shares issued to employees under compensation plans.
Several carve-outs apply. Buybacks totaling under $1 million in a tax year are exempt, along with repurchases that are part of a tax-free reorganization, stock contributed to employer-sponsored retirement plans, and transactions by regulated investment companies or REITs. Most individuals will never see this tax directly, but it can influence how the companies you invest in return capital to shareholders.
IRS Funding for Enforcement and Modernization
The IRA originally provided roughly $80 billion to the IRS over ten years for technology, taxpayer services, and enforcement.12Internal Revenue Service. IRS Inflation Reduction Act Strategic Operating Plan The Fiscal Responsibility Act of 2023 and subsequent appropriations bills clawed back well over half of that money.
The remaining funds still support two lines of work: modernizing paper-based filing and refund processing on the service side, and pursuing high-income individuals and complex corporate returns on the enforcement side. The agency has stated that audit rates for households earning under $400,000 will not rise as a result of this funding.
Credits You Can Still Claim on a 2025 Return
The energy and vehicle credits are gone going forward, but purchases and installations completed before the cutoff dates can still be claimed on the 2025 return you file in 2026.
Home Energy Improvements
The Energy Efficient Home Improvement Credit (Section 25C) covered 30% of qualifying insulation, exterior windows and doors, and similar building envelope upgrades, subject to a $1,200 annual cap with sub-limits inside it.13Internal Revenue Service. Energy Efficient Home Improvement Credit Heat pumps, heat pump water heaters, and biomass stoves fell under a separate $2,000 annual limit, so the theoretical maximum in a single year was $3,200.
The Residential Clean Energy Credit (Section 25D) provided a 30% credit for solar panels, wind turbines, geothermal heat pumps, fuel cells, and battery storage of at least 3 kilowatt-hours, with no annual dollar cap.14Internal Revenue Service. Residential Clean Energy Credit Equipment and labor both qualified. Property placed in service on or before December 31, 2025 is eligible; anything later is not. Both credits are nonrefundable, so they can zero out your tax bill but cannot produce a refund beyond it.
Electric Vehicles Bought Before September 30, 2025
The new clean vehicle credit was worth up to $7,500 for qualifying vehicles acquired on or before September 30, 2025, with final assembly in North America, MSRP caps of $80,000 for trucks, vans, and SUVs or $55,000 for other vehicles, and income limits of $300,000 (joint), $225,000 (head of household), or $150,000 (other).15Office of the Law Revision Counsel. 26 U.S. Code 30D – Clean Vehicle Credit The used clean vehicle credit equaled 30% of the sale price up to $4,000, with a $25,000 vehicle price cap and income limits of $150,000, $112,500, and $75,000.16Internal Revenue Service. Used Clean Vehicle Credit
If you took the credit at the dealer as an upfront discount and your final income for the year turns out to exceed the limits, you may have to repay it when you file. Check your purchase paperwork before filing.
State Home Energy Rebates
The IRA also funded roughly $8.8 billion in grants to states for two rebate programs, the Home Efficiency Rebates (HOMES) program and the Home Electrification and Appliance Rebates (HEAR) program. These are point-of-sale discounts, not tax credits, and eligibility depends on household income relative to the area median where you live. Households under 80% of area median income can receive rebates covering up to 100% of the cost of qualifying electric appliances like heat pump water heaters and heat pump HVAC systems, and those between 80% and 150% qualify for up to 50%.17ENERGY STAR. Home Electrification and Appliances Rebate Program
Rollout has been uneven. As of early 2025, only about 11 states and the District of Columbia were actively accepting applications, and an executive order pausing disbursement of IRA-appropriated funds delayed things further. Whether rebates are available where you live in 2026 depends on your state’s program and whether federal money keeps flowing. Contact your state energy office before planning an upgrade around one.