Tax credit

The tax credit is a scheme introduced by the French government to reduce income tax for private individuals. Under this system, a certain amount is deducted from a person's income tax bill.

The goal is to encourage taxpayers to undertake expenses seen as socially responsible, such as employing home help for services to individuals or having renovations carried out to save energy or cut greenhouse gas emissions. By granting a tax deduction on these expenses, the government encourages such initiatives and promotes their development.

Below you'll find information on what the tax credit applies to and the conditions under which taxpayers are eligible.

The tax credit for personal care modifications

Certain costs incurred when carrying out refurbishments for personal care purposes are eligible for the income tax credit, for example when installing or replacing health, safety or accessibility facilities designed for the elderly or people with a disability (elevating device, handrails, non-slip floor coverings, toilets for people with a disability, etc.).

In such cases, the tax credit is 25% of the installation cost or purchase price. Nevertheless, expenses used to calculate the tax credit are limited to €5,000 for a single person and €10,000 for a couple subject to joint taxation, i.e. those married or in a civil partnership. However, the tax credit can be increased by €400 for every dependent person.

The tax credit for employing home help

Although it used to be restricted to employees and jobseekers, the tax credit for employing home help was extended to all taxpayers under the 2017 finance act. However, a tax credit has only been available since 1 January 2018 for expenses incurred during 2017. This means that people who are eligible for this new tax benefit and incurred expenses in 2017 can claim the tax credit this year when they file their 2018 income tax return.

If you employ home help you are eligible for a tax credit subject to certain conditions. The following expenses are eligible for the tax credit:

• Childcare;
  * Educational support;
  * Assistance for the elderly or people with a disability;
  * Minor gardening work;
  * Minor DIY work;
  * Home maintenance and household chores;
  * Computer and internet support.

All of these services must be provided at your main residence by an employee, an association, a business or a certified or registered body. The tax credit amounts to 50% of the expenses incurred, with a €12,000 limit per year. Note that specific limits are also in place: annual expenses included when calculating the tax credit cannot exceed €500 for minor DIY work, €3,000 for computer support at home and €5,000 for gardening. Discover all our products

The tax credit for childcare outside the home

The tax credit is granted under certain conditions for childcare outside the home. To be eligible, your child must be aged under 6 on 1 January of the tax year and be under your care. Childcare must be provided by a childminder or a facility providing childcare for the under-6s (creche, day nursery, leisure centre, etc.). In these cases the tax credit is equal to 50% of the expenses incurred by the parents, limited to €2,300 per child.

Specific tax credits

• Tax credit for union dues: union dues are eligible for a tax credit equal to 66% of all dues paid.
  * Tax credit for technological risk prevention: if included under a technological risk prevention plan, technological risk prevention works carried out at an individual's main residence can be tax deductible. In these cases the tax credit amounts to 40% of the cost of the work and the preliminary assessment, limited to €20,000 per home.

The tax credit for energy-saving works

You may also be eligible for a tax credit if you have energy refurbishment works carried out at your main residence. The energy transition tax credit (CITE) provides a 30% deduction on the cost of works to improve a home's energy efficiency, within five years of completion. This amount is limited to €8,000 for single people, €16,000 for couples and an additional €400 for every dependent person.

The 2018 finance act reduced the CITE for certain insulation works from 30% to 15% on the cost of replacing windows, front doors and insulating shutters, as well as installing oil boilers. Meanwhile, the French environment minister Nicolas Hulot's climate plan includes a tax credit for 2019 in the form of bonuses granted to individuals immediately after carrying out energy refurbishment works.

• Who is eligible for the tax credit for energy-saving works?

Recipients of the 2018 CITE are required to meet several conditions. To be eligible, you must be an owner-occupant, tenant or non-paying occupant (landlords are excluded from the system) and the household must be resident in France for tax purposes. The works must also be carried out on the main residence, which must be more than two years old when the works begin.

• Equipment and materials eligible for the tax credit

Energy refurbishment works eligible for the tax credit mainly involve insulation, heating and hot water production. All of the work must be carried out by a professional who is environmentally certified ("RGE"). The following work is eligible for the tax deduction:
-Insulation work (floor, walls, terraces, lofts, roofs);
-Replacement doors, windows and glazed doors;
-Energy-efficient boilers;
-Energy-related works;
-Heat pumps;
-Wood or biomass heating;
-Solar-powered heating and water heating;
-Electricity supply systems.

Other expenses are also eligible for the energy transition tax credit, e.g. the cost of connecting to a district heating or cooling system or having an energy efficiency assessment performed, with no legal obligation. You may also be eligible for an income tax deduction if you install an electric vehicle charging station.

• Tax credit and declaration

The deduction provided under the energy transition tax credit (ETTC) must be declared to the tax authorities when submitting an income tax return after the works have been performed using form 2042 RICI (which replaces form 2042 QE as of 2017). This form must be attached to your standard tax return. You are required to retain invoices and other supporting expense documentation for 3 years.