Stock exchange market display screen board on the street showing stock market crash sell-off in red colour

Inflation Reduction Act includes excise tax on stock buybacks

President Biden signed the bill into law August 16, 2022.

The Inflation Reduction Act (IRA) of 2022 (H.R. 5376) includes an excise tax that imposes a 1% surcharge on corporate stock buybacks. The provision adds a new IRC Section 4501, which would impose a 1% excise tax on publicly traded US corporations for the value of any of its stock that is repurchased by the corporation during the tax year. The provision applies to repurchases of stock after December 31, 2022.

The legislative text of proposed new IRC Section 4501 in the IRA is substantially the same as what was included in earlier versions of the Build Back Better (BBB) Act.

Sign up for EY Tax Alerts

Stay up to date in today's complex and rapidly changing corporate tax environment.


Publicly traded corporations with stock repurchase programs should consider how they may be affected by the provision’s potential application.

About this article