Hot Topic | February 2023
Our impressions on the accounting for key provisions in the recently enacted tax legislation.
The Inflation Reduction Act of 2022 (IRA) and the CHIPS and Science Act of 2022 (CHIPS), signed into law by President Biden, introduce new options for monetizing certain credits, a corporate alternative minimum tax, and a stock repurchase excise tax.
Companies subject to US federal tax law
Our guide includes preliminary guidance on US GAAP and IFRS® Accounting Standards considerations. This preliminary guidance is based on our current understanding of the IRA and CHIPS, and we will continue to analyze how the authoritative accounting guidance applies to some of the provisions.
We will update our views as further information becomes available, practice develops, and further research and analysis is completed. This guide has been most recently updated on Feb. 3, 2023.
While the Inflation Reduction Act is not the tax reform 2.0 that Biden campaigned on, it does include significant changes in tax policy, including a Corporate Alternative Minimum Tax, an excise tax on stock repurchases, and significant investment in IRS funding, which will impact individual and corporate taxpayers. The time is now for companies to get up to speed and prepare for implementation.
Jennifer Acuna
KPMG U.S. Principal, Federal Legislative & Regulatory Services, Washington National Tax
US tax legislation: IRA and CHIPS
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