Tax credit

What is a tax credit

A tax credit is a mechanism allowing you to deduct an amount from your taxes.

In accordance with article D7231-1 of the French Labour Code concerning personal service activities, two conditions apply to qualify for a tax credit:

• Lessons must be given at the student's primary or secondary residence.
• Lessons must be given individually

The applicable rate is 50% of the corresponding charges for the year.

Example:

For an expense of €240 eligible for a tax credit (such as a package of 4 home guitar lessons), the tax credit amount is €120

Deduction ceiling:

Eligible expenses are limited to €12,000 per year.

This ceiling benefits from an increase of €1,500 in certain cases:

• Per dependent child (€750 in case of shared custody)
• Per member of your household over 65 years old
• Per ascendant over 65 years old.

Difference between tax reduction and tax credit

Unlike a simple tax reduction, a tax credit is available to all taxpayers, even if their tax amount is less than the tax credit they can claim, or even if they are not taxable.

In summary, if the tax credit exceeds the tax due, the excess is refunded to the taxpayer.

Example:

• If a taxpayer, liable for €300 in tax, benefits from a €500 tax credit, they will receive a cheque from the Treasury for the difference, i.e. €200.
• If a non-taxable taxpayer benefits from a €500 tax credit, this amount will be refunded by the Treasury.

Learn more: https://www.impots.gouv.fr/particulier/emploi-domicile

Payment of lessons with the tax credit

Amounts paid qualify for a 50% tax credit under the regulations relating to personal services.

You can choose to benefit from the immediate tax credit advance or from an annual tax credit:

1 - Immediate tax credit advance

A service set up by Urssaf and the Directorate General of Public Finances, the immediate tax credit advance aims to simplify the reimbursement process by giving you the 50% reduction at the time of invoice payment.

This service is optional and free of charge.

To benefit from this service, you simply need to meet the following eligibility conditions:

• Have a tax number associated with your civil status
• Have a tax household in France and have already filed at least one tax return
• Not be receiving the personalised autonomy allowance, disability compensation benefit, or special payment vouchers.

To benefit from this, you can request it during our first meeting, or by email.

The immediate advance: how does it work?

1. Upon simple request, I register you for the service. You receive an email to activate your account on particulier.urssaf.fr
2. Each month, I issue a payment request for services rendered. The immediate tax credit advance is automatically deducted.
3. Urssaf sends you a notification by email or SMS to inform you that a payment request has been sent.
4. You have 48 hours to verify and validate it online on particulier.urssaf.fr. Beyond this deadline, the request is automatically validated. D+2 after validation, Urssaf debits the amount from your bank account.
5. Urssaf pays me the full amount of the service. Your tax return is pre-filled — verify the accuracy of the information.

Have a question?

For any request or question, I am your primary contact.

On the Urssaf website you will find a FAQ about the immediate tax credit advance that will answer all your questions.

For any other question (ceilings, supporting documents…), I invite you to also consult the government website about personal services.

2 - Annual tax credit

If you do not choose the immediate tax credit advance, payment is made at the end of each month by bank transfer or cheque. I then provide you with the invoice corresponding to the lessons given during the month and you pay the full amount. The tax reduction will be applied during your next tax return.

Tax certificate

In January of each year, I send you a tax certificate showing the total amount paid the previous year. This certificate will be used to fill in the "amounts paid for the employment of a home worker" field of your tax return. The tax credit is calculated based on this declared amount.

For any additional information on current tax legislation, I invite you to contact your local tax office.