Every year, retirees miss out on a tax lever. By helping their children, they can reduce their taxes, provided they know where to look on their return.
Completing your income tax return remains a necessary step, even after the end of working life. For many retirees, the exercise has become routine, almost automatic, to the point of no longer really paying attention to the details of the form. However, certain sections can actually change the final amount to be paid. This is particularly the case for seniors who continue to financially support their adult children.
Between long studies, sometimes unstable career starts or even the cost of housing, many young people need one-off or regular support. Parents often extend this support without asking any questions, by sending money for rent, groceries or daily expenses. This gesture is a matter of family solidarity, but it also has a very specific tax implication.
Indeed, when this assistance is recognized by the tax administration, it allows the sums paid to be deducted from taxable income. In concrete terms, this means that the tax is calculated on a reduced basis, which can represent a significant saving. To do this, the child concerned must be of age and no longer be attached to the parents’ tax household. He must also be in a situation justifying this assistance, whether it is studies without sufficient income, precarious employment or significant responsibilities. For their part, parents must be able to prove the reality of the payments, with concrete traces such as bank transfers or invoices.
Then, for this deduction to be effectively taken into account, it must be declared correctly. And this is where many people miss out. On the income declaration form, a specific section is dedicated to deductible expenses, in which it is possible to indicate the alimony paid: box 6EL. It is by entering the amount of assistance paid to an adult child that the deduction is automatically applied to taxable income.
However, this process must be anticipated as a whole: the sums deducted by the parents must in fact be declared by the child as taxable income. It is therefore important to check in advance that this aid does not cause you to change your tax bracket or increase your own taxes. Used correctly, this option remains advantageous, but it requires a global vision of the tax situation of each member of the household.
