Why millions of households in France are about to receive a tax credit

More than nine million households in France are set to receive tax credits and reductions paid directly into their bank accounts next week.

The payments are set to be sent on Monday, January 16. On average, households will receive €624, but it will depend on your tax return.

Who is eligible?

To be eligible, households must have completed income declarations in the spring of 2022, including declaring expenses incurred in 2021 that were eligible for money off their tax.

Next week’s payments are an advance relating to expenses incurred in 2022 (which you will declare in spring 2023) on the assumption that they are likely to have been comparable.

Households will receive a cash advance, known as the ‘RICI’ advance. In total, €5.6billion will be paid.

Eligible situations include payments for: The employment of a home-based employee, childcare expenses for children under six years, expenses for the accommodation of a relative in a nursing home, buy-to-let investment schemes (Pinel etc), donations to political parties and charities, and union membership.

The amount paid corresponds to 60% of the total amount of tax credits and/or reductions as shown on your most recent income tax notice received in the summer of 2022.

An advance will only be paid out if there is at least €8 payable.

How will it be paid?

It will be paid directly into eligible bank accounts, in a single instalment under the heading ‘AVANCE CREDIMPOT’.

Some 221,000 tax households whose bank details are not known to the tax authorities will receive the advance in the form of a cheque letter by the end of January.

You can check if this applies to you (amount and payment method) by logging into your personal account on impots.gouv.fr over the next few days before January 15.

If 2022 was the first year you became eligible for tax credits, you will not receive a payment in January this year.

Instead, you will receive the full amount of the tax reductions or credits next summer and may receive an advance in January 2024 based on your 2023 tax return.

What about the remaining 40% of the tax credit?

The remaining 40% (to round out the 60% set to be paid this month) will, if appropriate, be paid during the summer of 2023 on the basis of the tax return completed next spring.

For example, if your 2021 income includes a tax reduction of €500 for a donation to an association and a tax credit of €1,500 for the employment of a cleaning lady, an advance of €1,200 (2,000 x 60%) will be paid to you in mid-January.

You will receive the balance of €800 next summer, provided that your tax situation has not changed in 2022

Do I have to repay the tax credit?

Only if you did not actually qualify for it because you did not have similar expenses in 2022 compared to 2021.

If, last year, you did not incur expenses that would have qualified for tax reductions or credits, and did not inform the tax authorities before December 14, you will need to repay the advance you received.

Employ a home worker? The form is set to change in 2023

From spring, tax authorities will ask taxpayers who employ a cleaner, gardener, or childminder for more details.

On their tax return, household employers will need to precisely describe the activity of their home-based employee.

The government states this is to enable it to “review the relevance of eligible services…and the level of coverage”.

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