TAX CREDIT. The tax credit for childcare expenses has been revalued for this 2023 reporting campaign. A significant gain.
[Updated April 13, 2023 at 10:37 a.m.] Are you domiciled in France for tax purposes? It is quite possible that you are entitled to a refund from the tax authorities: the tax credit. Certain expenses such as child care at home may entitle you to this tax benefit. These should then be noted on your 2023 tax return, on Forms 2042 RICI and 2042 for donations and home employment expenses. Regarding the payment, an advance (60%) is paid in January 2023, the balance (40%) will be paid in spring 2023.
And for this 2023 declarative campaign, a great novelty is appearing. The ceiling of the tax credit for childcare expenses for children under six years old is increased from 2,300 euros to 3,500 euros per child. The 50% tax credit therefore rises to 1,750 euros per child. If custody is shared, these 1,750 euros will be shared between the two registrants. That is a gain of 600 euros compared to the amounts applied during the 2022 tax declaration (last year). To declare this income on your return, you must complete boxes 7AG to 7GG.
The tax credit is a device to reduce the amount of your tax if you incur certain expenses. For example: the tax credit for tutoring. This tax benefit applies via a refund of income tax. It concerns other types of expenses such as small gardening work, subscription to the press, or assistance to the elderly or disabled.
The research tax credit (CIR) is a support measure for research and development activities (R
The innovation tax credit is a tax measure reserved for SMEs. The latter can benefit from a tax credit of 20% of the expenses necessary for the design and/or the production of prototypes or pilot installations of a new product, within the meaning of the tax definition. The base is capped at €400,000 per year and per company. The declaration is made with the same form Cerfa N° 2069-A-SD and according to the same methods as the research tax credit (CIR). Under certain conditions, SMEs can benefit from early repayment of their CII.
Do you have your child cared for by an approved childminder or in a crèche, daycare center or daycare centre? If your child is under 6 on January 1 of the tax year and is effectively your dependent, you are eligible for a tax benefit. The tax credit corresponds to 50% of the sums incurred, up to a limit of 3,500 euros per child since January 1, 2023 (1,150 euros in shared custody). The maximum amount of the tax benefit is therefore EUR 1,750. This tax credit is also considered as recurring and gives rise to an advance at the beginning of the year. The declaration takes place in box 7GA to 7GG of form n°2042 RICI.
Here, several expenses are eligible for the tax credit because they are considered recurrent, such as tutoring, childcare, domestic services, collection and delivery of ironed linen, assistance for the elderly and disabled or small gardening work and small DIY services.
For the employment of an employee at home, coverage represents 50% of the expenses incurred over the year, up to a limit of 12,000 euros per year. This ceiling is increased by 1,500 euros depending on the family situation. It is increased to 15,000 euros for the first year in which you directly employ an employee at home (18,000 euros depending on the family situation). If one of the members of the tax household is disabled, the ceiling is increased to 20,000 euros.
Here is the list of activities eligible for the tax credit for the employment of a home-based employee:
The CITE (tax credit for energy transition) is gradually being replaced by a lump sum premium paid by the ANAH (National Housing Agency) upon completion of the work called MaPrimeRénov’. Since last year, Ma Prime Rénov’ has been accessible to all households, whatever their income. In total, four categories of income exist, depending on the location of your accommodation. The amount of your aid therefore depends on the nature of the work undertaken, the location of your main residence – the only accommodation eligible for Ma Prime Rénov’ – and your level of income. The request must be made on the site maprimerenov.gouv.fr. The payment of Ma Prime Rénov’ takes place within two to three weeks after the submission of your file, complete, quotes and invoices in support.
Work to install and replace certain equipment specially designed for the elderly or disabled is eligible for the tax credit. Expenses incurred for sanitary, safety or accessibility equipment can be reimbursed, up to 25%, up to a limit of 5,000 euros for a single person, 10,000 euros for a couple subject to joint taxation, then EUR 400 additional per dependent. For this device too, refer to form n°2042 RICI, in boxes 7WJ and 7WL. Please note that the taxpayer or a member of the tax household must hold a disability pension of at least 40%, or hold a disability card or suffer from a loss of autonomy.
The energy transition tax credit made it possible to finance the installation of windows, pellet stoves or boilers. Now it has been deleted. There is therefore no longer a tax credit strictly speaking. Since January 1, 2020, it has been replaced by a new aid system, paid at the end of the work, called Ma Prime Rénov’.
The tax credit has become contemporary for expenses related to the employment of an employee at your home such as gardening, DIY or cleaning as of Tuesday, June 14, 2022. In other words, the tax credit is now snapshot for these expenses. No more waiting for a refund. With this advancement, the instant tax credit is extended to more than 1.8 million people. 8,000 associations and/or platforms are concerned. Concretely, you will therefore only pay 50% of the actual cost of the service, every month. Indeed, the State will take care of paying the other half directly to the employee or to the provider company. Please note, keep in mind that if the tax credit advance concerns the employment of an employee at home, it is necessary to have subscribed to the Cesu service of Urssaf and then to connect to your Cesu account. to activate the service option of immediate advance before declaring the hours worked each month.
Are you wondering because you have not received this famous advance from the tax authorities and have not received an email? First of all, make sure you have transmitted all of your bank details to the tax authorities. Next, check your eligibility. Not all tax credits entitle you to an advance. Only tax benefits considered recurring are affected, here they are:
Note that this tax credit changed in 2022. Regarding the calendar, all tax households in the Paris and Nord departments were eligible for the contemporaneity of the device. In January 2022, the measure was to be extended to the whole territory for all “direct employers” according to Capital.fr. Then, from April 2022, all households requesting a service provider will be eligible. The executive wishes to ensure that this tax benefit becomes contemporary, as if subject to withholding tax. Note: if the tax credit advance concerns the employment of an employee at home, it is necessary to have subscribed to the Cesu service of Urssaf and then to connect to your Cesu account to activate the option. immediately before declaring the hours worked each month.
Clearly, it is now being paid in “real time” every month starting in 2022. In reality, what will change? At present, you declare your expenses eligible for the home employment tax credit in the spring, at the same time as your income tax return. From this information, the tax authorities assess the amount of a 60% advance paid to you in January, the following year. The tax return that you make for that year then makes it possible to determine the deposit remaining to be paid, and the amount of the 60% advance for the following year. With the “instantaneous” tax credit, this mechanism ends for the tax credit for the employment of an employee at home. Concretely, you will therefore only pay 50% of the actual cost of the service, every month. Indeed, the State will take care of paying the other half directly to the employee or to the provider company.
To benefit from future tax credits, you must indicate to the tax authorities the amount of the expenses eligible for your tax benefit(s). This procedure occurs at the same time as the declaration of income in the spring. It is necessary to communicate the amount of the expenses incurred, in particular via declaration n°2042 RICI if you do not declare online. This document is available at your local public finance center, or on the official tax website, here, and should be attached to Form 2042 of your tax return. Remember that you must keep all receipts for expenses paid. The tax authorities are likely to ask you for them.
January 2023 saw tax credit recipients take advantage of an advance. Paid to more than 9 million tax households, this deposit amounts to an average of 624 euros per household under the heading “ADVANCE CREDIMPOT”. What does it correspond to? The deposit paid corresponds to 60% of the tax benefits estimated as regular by the tax authorities. The remainder of this deposit is paid in the summer. To claim it, it is essential to have benefited from tax reductions or credits in 2022. Are you surprised not to have received this famous transfer from the tax authorities? Several factors can explain a lack of payment of the tax credit installment. Start by checking that you have transmitted your bank details to the tax authorities and then check your eligibility for the scheme. Only a few reasons are eligible, those considered recurring.
If your eligible expenses in 2022 are stable compared to 2021, no problem, you will collect the remaining 40% in the summer. If these have fallen, the tax authorities will be entitled to make you pay the difference. You will have to repay. Finally, if your tax credit advance is less than 8 euros, the tax authorities do not make any payment or levy. You will have to wait until the summer, after studying your file, to determine if the tax authorities are liable for the rest of the tax credit.
You can check your eligibility on your personal space on the impots.gouv.fr website by logging in using your tax ID on your last tax notice. In reality, the taxpayers concerned have already received an email to benefit from this tax credit advance. If you no longer employ a home helper, you can check the information mentioned in the withholding tax section and then click on “Manage your advance of reductions and tax credits”. You can then reduce or remove the planned advance. This is the best way in the future to avoid having to reimburse the tax authorities later, in this case in the summer once your tax return has been completed and taken into account by the tax authorities.
Declaration, advance, reimbursement… Are you still struggling to see clearly despite the withholding tax? Here are the main deadlines to remember about the tax credit for the coming year:
