ACA subsidy vs EV credit

[twaddle]

Hi!

ERs are a bit odd in that we can control our income to play various tax games. 2023 seems like an interesting year for these games.

So I just bought a Tesla that ostensibly qualified for a $7500 tax credit, but I only get that credit if my tax liability >= $7500, and usually it's less than that. No problem -- I can goose my income with cap gains, Roth conversions, etc.

But if I keep my income low enough, I may qualify for health insurance subsidies via the ACA.

If my income estimate is low, I can get an immediate ACA subsidy. AFAICT, there is no penalty for a low estimate, but it can create a clawback liability when I file my taxes, right?

So here's my convoluted question for you: can that ACA clawback be offset by tax credits, like the 2023 EV credit?

 

[SevenUp]

can that ACA clawback be offset by tax credits, like the 2023 EV credit?

Yes. The APTC repayment goes via Schedule 2 to form 1040 line 17. The EV credit goes via Schedule 3 to form 1040 line 20, etc.

You might find Roth Conversion and Capital Gains On ACA Health Insurance useful. The potential EV credit can be thrown into that mix as well.

 

[SecondCor521]

Yes, the idea works. Note a partial limitation: If your AGI is less than 400% of FPL, your repayment is limited to some number which is much less than $7,500. See the instructions for Form 8962 line 28 and Table 5 at https://www.irs.gov/pub/irs-pdf/i8962.pdf page 15 column 2.