Have you just finalized your income tax return and are hesitant to click on Yes, I want to adjust my withholding tax? If your resources have fallen significantly in 2024, this may be a good idea.
At the end of the income declaration, the tax authorities reveal your new withholding rate at source. This is the rate that will apply to your income from September 2024. The tax administration has therefore calculated this new rate on the basis of your 2023 income, the income you have just declared.
Is the rate announced by the tax authorities lower than your current source tax rate? Or are you anticipating difficult end times in the coming months following a hard blow at the start of 2024? You can take advantage of the declaration duty to request a modulation of the withdrawal rate from now on. The DGFiP notes each year a very strong peak of activity in April on its section manage my withholding at source.
Salaris: an estimate to be made and a reduction subject to conditions
The downward modulation of the levy is subject to a condition: it only applies in the event of a significant drop. More precisely if the new amount of withholding tax falls by 5% or more compared to the initial withholding.
A very occasional reduction in your resources due to partial unemployment will therefore probably not be enough to request a reduction in your withholding rate, since to do this you must estimate the annual amount of your income for 2024. On the other hand, if you lost your job at the start of 2024or if the economic context has caused a lasting drop in your remuneration (in the case of variable bonuses for example), modulation is completely justified!
Rate modulation, instructions for use
In your personal space on impots.gouv.fr, click on Manage my direct debit at source. In the new window click on Update following an increase or decrease in your income.
The Public Treasury then asks you to deliver the estimate of the net taxable income that you expect to receive during the year 2024. It is then necessary to forecast the evolution of your resources over the coming months. Don’t panic, it’s impossible to anticipate the euro for your 2024 income!
The General Directorate of Public Finances (DGFiP) invites you to carefully evaluate your 2024 resources… Either based on taxable income (net taxable salary on a pay slip) for the last few months, by multiplying one month by 12 if this income is regular (1). Either by estimating the drop in income in the coming months if you anticipate a fall. Please only make a good faith estimate: in all cases the tax authorities will regularize your final tax on 2024 income next year, via the 2025 declaration.
The rate modulation can theoretically be effective from the end of June for a request made at the beginning of June but this also depends on the employer, who has 2 months from [la rception du nouveau taux] to apply it. Attention: the rate thus modulated applies until December 31, 2024. In the event of a lasting drop in your income, you will have to repeat the operation at the end of the year.
A reduced deduction in the event of temporarily reduced income
If your salary or other income paid by third parties temporarily decreases in 2024, your monthly withholding tax automatically decreases. This is also the advantage of withholding at source: a rate is applied to your salary, your allowances or retirement pension each month to calculate the withholding. If the amount of salary drops temporarily, the amount of tax withheld also drops proportionally.
Demanding a reduction in the rate responds to a more lasting erosion of income.
Self-employed and property income: options for elimination or postponement of deposits
The request to update the withholding rate is obviously accessible to taxpayers carrying out an independent activity. However, as the withholding tax takes the form of a monthly (or quarterly) installment for you, you have two additional options: deferring or canceling your deposits.
Go to the same section Manage my withholding tax on impots.gouv.fr: then click on Manage your deposits in the left column. You access a table presenting your deposit(s) by income category (BIC, BNC, property income, etc.). For example, if you have a deposit for a commercial activity and also property income but you no longer receive any rent, you can click on the red button DELETE the land income line: this action will only delete the corresponding category deposit.
Second option. It concerns you if you carry out an independent activity, not if you only pay installments for property income. If you are facing temporary difficulties, without having lost any source of income, you can click on the orange button Postpone. This option allows you to defer the payment of the monthly withdrawal from one month to the next, up to three times if their installments are monthly, details the tax authorities, or from one quarter to the next if their installments are quarterly.
Whether it is a request for deletion or postponement, the request will be taken into account in the following monthpromises the Public Treasury, as long as the request occurs until the 22nd of the month: a cancellation of the deposit will therefore be effective in June if you request it by May 22, inclusive.
Income 2024: a definitive calculation of tax in 2025
It is only after having completed the 2025 declaration relating to 2024 income that your tax due on income for the current year will be calculated to the nearest euro. If you pay too much or too little tax at source during 2024, the amount will be regularized, but in the summer of 2025, following the next declaration.
(1) You don’t know your net taxable income, only net income? If you do not have one, you can estimate it by increasing your net income by 3%, advises the DGFiP in its help section.