From 20 September 2022, families using home care allowance for their children over the age of 6 can benefit from an immediate tax bonus. The new measure should affect almost 90,000 households.
If you care for your child at home or with an approved babysitter, in a crèche, day care center or leisure centre, you may be granted a tax bonus under certain conditions. From September 20, 2022, families have additional support. Actually, parents of children over 6 years of age who take care of their children at home can now take advantage of an immediate tax credit advance. It is clear that families, whether or not they are subject to income tax, can be refunded as soon as the service is billed to the personal service company. Previously, you had to wait several months for a refund. This new system comes after the adoption of the Social Security Financing Act 2022. For the Federation of Services for Individuals (FESP), which represents service provider companies, this simplified measure is an effective way to combat illegal work. According to Ursaffová, approximately 90,000 families will benefit from this.
Conditions for tax relief for childcare expenses
The tax credit is 50% of childcare costs (without food costs and after deducting the family allowance) up to an annual limit of 12,000 euros. The expenses taken into account therefore include salaries and social security contributions paid to the nanny. They are limited to the amount of 2,300 euros per child in care (1,150 euros in the case of joint care). For that, the amount of the tax bonus may not exceed 1,150 euros per child, a 575 euros in case of alternate stay. Also, don’t forget to deduct the help the cafe received, especially for the additional free choice of childcare. Also know: expenses related to leisure centers establish the same tax bonus.
For example: if your babysitter costs €6,000 per year and you receive €4,000 per year from the cafe, your declared expenses are therefore €2,000, which is less than the ceiling of €2,300. When the tax bonus is divided by two, you end up with €1,000 back.
How do I deduct my tuition fees?
If your child is dependent on you, you can take advantage of the tax reduction, as well as if they are of legal age and connected 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, as of December 31, 2022 (for income taxation for 2022). The reduction in income tax therefore represents:
- 61 euros per child continuing their studies at university > 30.50 euros in the case of joint care
- 153 euros per child continuing his studies at secondary school > 76.50 euros in the case of joint care
- 183 euros per child after university course > 91.50 euros in case of joint care
In order to benefit from this assistance, students must not have a concurrent employment contract or be paid. They must be released from any obligations during and at the end of their studies.
How does automatic reporting work?
If you have not reported any change of address, birth, marriage or establishment of a tax advance compared to last year, automatic declaration (or silent declaration) You will then be offered with a pre-filled income in the administration, which you will have to check in your particular space. If the information seems correct to you, you will not need to take any action. Conversely, depending on your situation, you will need to complete and sign a tax return.
Deduction of child support
- In the case of shared custody After a divorce or separation, you cannot deduct any pension because you benefit from the increase in the number of shares. On the other hand, in the absence of a judgment, you can withhold the amount corresponding to the performance of your maintenance obligation. You must then be able to justify your payments (note that the costs associated with the right of access are not deductible).
If your (adult) child still lives with you
You can deduct alimony if your child is not included in your tax household for income tax purposes and his income is insufficient (continues his studies or is unemployed). The amount of the deduction is limited to 3,592 euros (double 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, may not exceed 6,042 euros per child. In addition, if you only accommodate your child for part of the year, this amount will be reduced in proportion to the number of months concerned. If the month has started, it is counted as a whole.
If your (adult) child no longer lives with you
- If you have decided not to bring your adult child, you can pay him a alimony without hosting it. It can be a pension for a child who continues his studies or is unemployed. If his income is insufficient, you can opt for this solution. You just have to provide proof of payment of alimony and your child’s lack of sufficient income. In all cases, it is possible to use the income simulation to find out whether it is more advantageous to restrain the child or, if he is of legal age, to pay him a pension so that he can file his own tax return. So if you are a couple and have joint taxation, you can deduct expenses within the limit 6,042 euros for one child (regardless of whether they are single or not), 12,084 euros 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 ceiling is the same regardless of whether you are separated or taxed separately. In this case, each of the parents can deduct their expenses. Please note that if only one parent pays a pension to an adult child, the deduction is doubled.
- Unlike the supplement, this deduction is possible even if your child is over 25 and no longer a student. The withheld alimony is then taxable on behalf of the recipient. Please note that you will still need to choose between alimony deduction or blocking, because it is not possible to benefit from both at the same time.
That fits number of parts which you may benefit from depending on your situation (married, PACS, single or cohabiting) and children in your care. So, some cases entitle you to other actions that will reduce your taxes. For example, if you are married or a couple with PACS and are subject to joint taxation, you are entitled to 2 shares of the family quotient. You will then be granted an increase in shares if you have dependent children (minors or unmarried adults):
- 2 parts from a child for people living alone, compared to 1.5 share for people living together. And for each additional child, you are entitled to an additional half share.
- For married or PACS couples, in case of joint taxation, they are allocated two shares from the family share, then a half share for each number of additional dependent children and a full share from the third child. However, the tax reduction associated with the family quotient is limited to €1,592 for each additional half share a 796 euros for each additional quarterly share.
Did you have a baby in 2022?
Think carefully record your child’s marital status in his statement from any birth during the year entitles you to a half or additional share depending on your family situation, regardless of their date of birth (including 31/12/2022). If your baby is born in early 2022, you can report the birth online under “Manage my withholding tax” to update your income tax return prepared for 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 use a stock increase, which is equal to half of the amount provided in case of exclusive stay. Therefore, if the child gives the right to a share, the parents will each receive a half share.
Annex to the tax: until what age?
You can request that your child be restrained if he is under 21 years of age on January 1 of the tax period. Persons below 25 years of age may be joined with their parents provided they continue their studies on the same date. Note: You will have 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 apply for a connection that allows you to use increase in the number of shares for the calculation of the family quotient. If he is married, has PACS or has children, then you can get a benefit of €6,042 per dependent (your child, his spouse and their children) from your income.
Purchasing power simulator. The government offers a tool that allows taxpayers to assess 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