H.R.2463 - Mechanical Insulation Installation Incentive Act of 2025 (119th Congress)
Summary
H.R.2463, the Mechanical Insulation Installation Incentive Act of 2025, proposes an amendment to the Internal Revenue Code of 1986. It introduces a tax credit for the labor costs associated with installing mechanical insulation property. The credit is equal to 10% of the mechanical insulation labor costs paid or incurred by the taxpayer during the taxable year. The bill defines 'mechanical insulation property' and sets a termination date for the credit after December 31, 2028.
Expected Effects
The bill aims to incentivize the installation of mechanical insulation, potentially leading to reduced energy loss from mechanical systems. This could lower energy consumption and costs for businesses and individuals. The tax credit would be part of the general business credit, and conforming amendments would prevent double benefits through deductions.
Potential Benefits
- Reduced energy consumption and costs for businesses and individuals.
- Increased demand for mechanical insulation products and installation services, potentially creating jobs.
- Encourages upgrades to existing mechanical systems, improving energy efficiency.
- Supports compliance with Reference Standard 90.1, promoting energy-efficient building practices.
- Provides a financial incentive for businesses to invest in energy-saving measures.
Potential Disadvantages
- Potential complexity in calculating and claiming the tax credit.
- Possible administrative burden for the IRS in managing the new credit.
- The credit is temporary, expiring after 2028, which may limit long-term investment.
- May disproportionately benefit larger businesses with more significant mechanical systems.
- Potential for misuse or fraudulent claims related to mechanical insulation labor costs.
Constitutional Alignment
The bill aligns with the general welfare clause of the Constitution (Preamble). Congress has the power to lay and collect taxes to provide for the general welfare of the United States. Article I, Section 8, Clause 1 grants Congress the power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).