What is a tax credit?
Tax credit: definition
The tax credit is an amount that comes deducted from income tax owed by a taxpayer. There are several types: the tax credit for employing an employee at home, for childcare costs, etc. These measures aim to encourage certain expenses deemed useful by the public authorities, by reducing the total cost borne by the taxpayer.
A tax refund or relief
If the amount of the tax credit is lower than income tax due, it reduces the tax owed by the taxpayer. If the amount of the tax credit is higher than tax on income, the surplus or the entirety (if the taxpayer is not taxable) is reimbursed by the General Directorate of Public Finances.
What are the differences between tax deduction, tax reduction and tax credit?
Tax deduction: definition
The tax deduction is an amount removed from taxable income. She can be removed from overall gross incomefor example in the case of deduction of alimony. It can also be carried out on one of the category incomes, for example, the deduction of real expenses from the salary.
Tax reduction: definition
The tax reduction is a sum deducted directly from the amount of tax and not taxable income. It only applies to taxable persons. A tax reduction occurs, for example, when declaring a donation to an association when declaring your taxes. The tax reduction will be effective immediately.
Difference with the tax credit
Unlike the tax reduction, the tax credit benefits also to non-taxable persons : if its amount exceeds that of the tax or if no tax is due, the General Directorate of Public Finances reimburses the surplus or the entire tax credit. It thus allows a broader tax advantage.
What is eligible for the tax credit∞?
Cleaning lady, gardening, home help… examples of home services
THE personal services tax credit allows the taxpayer to benefit from tax reductions for employing an employee at home or via an approved organization to carry out various tasks at home. Here are the main services qualifying for the tax credit:
- Childcare at home, on a regular or occasional basis.
- Household chores: routine cleaning, ironing, laundry care, cleaning, etc.
- Gardening: small maintenance excluding any work requiring professional know-how.
- Small DIY: small jobs requiring no qualifications or heavy equipment.
- Assistance to elderly or disabled people: help with daily activities, vigilance at home or reassuring presence.
- Pet care and walking for a dependent person.
- Academic support or home lessons.
- Meal preparation, collection and delivery of linen, administrative assistance.
A tax credit open to all
This tax credit is open to all taxpayers active, non-active or retired who incur expenses for personal services. Whether for their primary or secondary residence and whether they are tenants or owners. This system aims to reduce the total cost of domestic services.
How does the tax credit for employing an employee at home work?
Amount of the personal services tax credit
The tax credit amounts at 50 % of expenses incurred for the provision of personal services. The amount of these expenses must be declared by the taxpayer in line 7 DB of the income tax return and the amount of aid received (APA, PCH, pre-financed CESU, etc.) must be reported in box 7 DR.
Annual tax credit limits
These expenses are, however, subject to an annual ceiling, which varies depending on the situation of the tax household. It varies between 12 000 euros and 20,000 euros per year in the event of disability or dependency of a member of the household. This ceiling can also be increased by up to 15,000 euros the first year of employment of a home-based employee.
How to benefit from the tax credit for childcare expenses?
Conditions for tax return
This tax credit applies to the care of young children less than six years (childcare costs linked to crèche or childminder expenses). Can benefit from this tax credit, parents or grandparents who:
- have one or more dependent children under the age of six on January 1 of the tax year (for the 2025 declaration of 2024 income, he or she must be born in 2018 or later);
- have the child looked after by an approved childminder;
- have the child looked after by an establishment for children under six years of age.
Aid received for childcare, such as the free choice of childcare supplement or aid paid by the employer, must be deducted.
Amount of the 2025 tax credit
The amount of the tax credit for child care expenses is equal to 50 % of amounts paid within the limits of the following ceilings. Only the expenses actually borne by the household, after deduction of any aid received for childcare, are taken into account for the calculation of this tax advantage.
Tax credit for donations made to organizations of general interest
The taxpayer can benefit from a tax reduction of 66 % on donations made to organizations of general interest, up to 20% of its taxable income. The amount of the tax reduction for donations made to organizations helping people in difficulty providing free meals is 75% up to a limit of 1,000 euros.
Tax credit for installation expenses for electric vehicle charging systems
Conditions for a single person and a couple
Taxpayers who incur expenses for the acquisition and installation of an electric vehicle charging system in their primary or secondary residence can benefit from a tax credit. It is limited for a single person to a charging system for the same accommodation. And for a couple with joint taxation, two systems.
Period of work completion
To be eligible, expenses must be paid as of January 1, 2024 and the work must be invoiced before the 31st December 2025 included. Invoices must include the necessary elements to identify the controllable nature of the charging station. Expenses paid in 2025 must be declared in 2026.
Amount of the tax credit for the installation of a charging station
The tax credit corresponds to 75% of expenses incurred, within the limit of 500 euros per controllable charging systemafter deduction of any aid or subsidies received (aid from local authorities, employer support, specific programs). Only expenses actually borne by the taxpayer are therefore used for the calculation.
Tax credit for work to adapt housing to loss of autonomy linked to age or disability
Work eligible for the housing adaptation tax credit
Taxpayers tax domiciled in Franceowners or tenants, can benefit from this tax credit. In cases where, they carry out work in their main residence facilitating access for an elderly or disabled person or work to adapt the home to loss of autonomy or disability. For example :
- installation of ramps;
- movement, signaling or alert detector;
- adapted doors or windows;
- non-slip floor covering;
- motorization of equipment…
Conditions related to disability and income
People who can benefit from it must also complete all three following conditions :
- Be aged 60 and over.
- Have a disability rate equal to or greater than 50%.
- Have an intermediate income level.
If a taxpayer meets these conditions, he must indicate the amount of expenses incurred in this regard in the corresponding box of his tax return to benefit from it. For expenses paid in 2025, the work must have been carried out before the 31st December 2025.
Amount and ceiling of the tax credit for work
The tax credit rate is 25 % of total expenditure. The latter is capped at 5,000 euros for a single person and 10,000 euros for a couple subject to joint taxation. These ceilings are assessed over a period of five consecutive years, which means that eligible expenses incurred during this period are cumulative.
When is the tax credit paid?
Payment of the 60% advance in mid-January 2026
A advance of 60 % on certain credits and tax reductions (employment of an employee at home, childcare costs, donations, union dues, etc.) will be paid in mid-January 2026. This advance is calculated on the basis of 2024 expenses, as they were declared in spring 2025.
For the year 2026, the advance will be paid the 15th January 2026, by bank transfer entitled “AVANCE CREDIMPOT”. The households concerned are numerous: more than nine million benefited from it the previous year, for an average amount of 639 euros.
Modification possible until December 11, 2025
If expenses qualifying for the credit have decreased in 2025, it is possible to reduce, adjust or give up your advance. To do this, simply go to your “Individuals” area on impots.gouv.fr, section: “Manage my withholding tax”, then “Manage your tax reduction and credit advances”. This avoids having to repay an overpayment in the summer of 2026.
Payment of the balance in summer 2026
The balance of the tax credit (the remaining 40%) will then be paid in the summer 2026 after a new calculation based on the income tax return filed in spring 2026, based on the expenses actually incurred in 2025. Two scenarios are possible:
- You are entitled to an amount greater than the advance received in January: the additional amount will be paid to you by the DGFiP in July-August 2026.
- You received too high an advance: you will have to repay the overpayment.
This system guarantees faithful regularization of expenses incurred throughout the year.
Immediate advance of tax credit
For taxpayers who benefit from the immediate advance offered by Urssaf as part of personal services, the amount already covered throughout the year is automatically deducted of the 60% advance paid in January 2026. This system allows you to benefit from the tax credit in real time.
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