From 20 September 2022, families using Home Care Allowance for their children over the age of 6 can take advantage of the immediate tax credit. A new measure that should cover nearly 90,000 households.
If your child is looked after at home or with an approved childminder, nursery, day care center or leisure centre, you may be entitled to a tax credit under certain conditions. From September 20, 2022, an additional boost is being given to families. in effect parents of children over 6 years of age who look after their children at home can now benefit from the immediate advance of the tax credit. It is clear that families, whether subject to income tax or not, can be reimbursed as soon as the service is billed to the personal service company. Before, you had to wait several months to get your refund. This new system comes after the adoption of the social security funding law for 2022. For the Federation of Services for Individuals (FESP), which represents service providers, this simplified measure is an effective way to fight against undeclared work. According to Ursaf, approximately 90,000 families will benefit from it.
Conditions for tax credit for childcare expenses
The tax credit is 50% of childcare costs (excluding food costs and after deducting family allowance) up to an annual limit of 12,000 euros. Thus, the costs that are taken into account include wages and social security contributions paid to the nanny. They are limited to €2,300 per child they care for (€1,150 in the case of shared custody). Therefore, on the amount of the tax credit cannot exceed 1150 euros per child, and 575 euros for alternative residence. Also remember to deduct the help received from the Caf, in particular the additional free childcare choice. Also know: expenses related to entertainment centers give rise to the same tax credit.
For example: if your nanny costs €6,000 per year and you receive €4,000 from Caf for the year, your declaring costs are therefore €2,000 ie an amount lower than the ceiling of 2,300 euros. The tax credit, divided by two, ends up being returned to you at €1,000.
How do I deduct tuition fees?
If your child is dependent on you, you can benefit from tax relief, as well as if they are of legal age and related to your household. For adults, tax reduction is intended to cover school fees for children, if they continue their secondary or higher education in a public or private institution, on December 31, 2022 (for 2023, taxation of income from 2022). Thus, the income tax reduction amounts to:
- 61 euros per child continuing their studies at college > €30.50 in case of shared custody
- 153 euros per child continuing their education in high school > EUR 76.50 in case of shared custody
- 183 euros per child after higher education > €91.50 in case of shared custody
In order to benefit from this aid, students must not have a parallel employment contract nor be paid. They must be released from all commitments during and at the end of their studies.
How does automatic reporting work?
If you have not declared a change of address, birth, marriage or creation of a withholding tax deposit from last year, automatic declaration (or silent declaration) You will then be offered income pre-filled by the administration, which you will need to check in your particular space. If the information appears to you to be correct, you will not need to take any action. Conversely, depending on your situation, you will need to complete and sign your tax return.
Child support deduction
- In shared custody After a divorce or separation, you cannot deduct any pension as you benefit from an increase in the number of shares. On the other hand, in the absence of a decision, you can deduct an amount corresponding to the fulfillment of your maintenance obligation. You must then be able to justify your payments (note that costs incurred by the right of access are not deductible).
If your (adult) child still lives with you
You can deduct maintenance if your child is not attached to your tax household for income tax and his income is insufficient (he is still studying or unemployed). The amount of the deduction is limited to €3,592 (doubled if your child is married or in a civil partnership). It mainly covers accommodation and food costs. The total deduction, including other expenses such as school fees for example, cannot exceed €6,042 per child. In addition, if you only accommodate your child for part of the year, this amount is reduced in proportion to the number of months in question. If the month has begun, it is counted as a whole.
If your (adult) child no longer lives with you
- If you have chosen not to tether your adult child, you can pay him a maintenance without hosting it. It can be a pension for a child who is continuing his studies or is unemployed. Indeed, if his income is insufficient, you can choose this solution. You just have to provide proof of alimony payment and your child’s lack of sufficient income. In all cases, an income simulation is possible to find out whether it is preferable to attach your child or, if he is of age, to pay him a pension so that he can file his own income tax return. Thus, if you are a couple and have joint taxation, you can deduct your expenses within the limit of €6,042 per child (whether single or not), €12,084 if your child is single, with children and you are supporting them, or if they are married or in a civil partnership and you are helping the couple. Your child must also declare the pension you pay him.
- The amount of the ceiling limit is the same whether you are separated or taxed separately. In this case, each of the parents can deduct their expenses. Note that if only one parent pays the adult child’s pension, the deduction is doubled.
- Unlike anchoring, this deduction is possible even if your child is over 25 and no longer a student. The alimony deducted is then taxed in the name of the beneficiary. Please note that you will still need it choose between alimony deduction or garnishment, because it is not possible to benefit from both at the same time.
Corresponds to number of parts which you can benefit from depending on your situation (married, PACS, single or cohabiting) and children under your care. Thus, certain cases entitle you to additional shares that will reduce your taxes. For example, if you are a married couple or a PACS couple and are subject to joint taxation, you are entitled to 2 shares of the family rate. You are then granted an increase in shares if you have dependent children (minors or single adults):
- 2 parts of a child living alone, against 1.5 shares for cohabitants. And for each other child you are entitled to an additional half share.
- For family or PACS couples, subject to joint taxation, they are allocated two parts of the family coefficient, then a half share for each number of additional dependent children and a full share from the third child. However, the tax reduction related to the family factor is limited to 1592 euros for each additional half share and 796 euros for each additional quarter share.
Is your baby born in 2022?
Think carefully record your child’s marital status in your statement since then every birth during the year entitles you to a half share or an additional share depending on your marital status, regardless of your date of birth (even 31 December 2022). If your baby is born in early 2022, you can report the birth online in the Manage my tax at source section so that you can update the income tax return prepared in spring 2023.
In this case, the child remains dependent on the parent with whom he usually lives and who takes care of him on a daily basis. In the case of alternating residence, on the other hand, each of the two parents can benefit from a stock increase, equal to half of that granted in case of exclusive residence. Thus, if the child gives the right to a share, the parents will benefit from a half share.
Tax lien: up to what age?
You can request your child’s attachment if under 21 years of age on January 1 of the tax year. For those under 25, they can also be attached to their parents provided they continue their studies on the same date. Please note: you will still need to add your child’s income to your income. This solution does not add a share of the family quotient, but it does exempts your child from taxes. On the other hand, if your child is of legal age and unmarried and therefore has no dependents, you can request a relationship that will allow you to benefit from increase in the number of shares for calculating the family coefficient. If he is married, on PACS or with children, then you can benefit from an allowance of €6,042 per dependent (your child, his spouse and their children) on your income.
Purchasing power simulator. The government offers a tool that allows taxpayers to estimate their purchasing power. Depending on your last reference tax income, the number of shares in your household and your professional situation, calculate your estimate. Check out the purchasing power simulator