A bill votes on the gong, Thursday, October 6, before midnight. The Modem deputies had one day to pass their proposals, including this one: to exempt from income tax alimony received by the parent who has custody of the child following a separation or divorce. The text was adopted but it has already evolved. The point on what could change for your support payments.
How are alimony declared today?
Fiscally speaking, the current logic is as follows. The custodial parent receives child support and pays tax on that income. And the parent who pays this alimony, each month, can reduce his taxes thanks to this pension paid. This logic sometimes looks like a puzzle and alimony is one of the common errors in the declaration of income.
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What the original text proposed
Today, when a judge decides on an amount of alimony, the fact is that this amount does not benefit the child 100% since a part is subject to tax, explained in September the deputy Aude Luquet MoneyVox. This is not an exclusively tax issue, nor a debate between men and women: the purpose of this bill is to allow the entire pension to be used for the education of the child.
In some cases, it is precisely because this pension is taxed that the parent who receives it is taxable… So we want to reverse this logic, continued Aude Luquet: tax-exempt the pension received, removing it from taxable income; and on the other hand, abolish the tax deduction benefiting those who pay this alimony.
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What has (already) changed the Assembly
The initial measure proposed by the Modem group has a potential perverse effect: to increase the tax on those who pay the pension, since they can until now deduct the amount paid from their income, by declaring the pension paid to the tax authorities.
Seeing the criticism approaching, the deputy Aude Luquet herself amended her bill during the examination by the Finance Committee: If the bill in its original version was virtuous from the point of view of public finances, reconsider the possibility given to the debtor, the parent paying a contribution for the maintenance and education of the child, to deduct this contribution from his taxable income could constitute a significant undesirable tax increase in the current period, she explains to justify drawing a line under the abolition of the tax deduction for parents who pay alimony. And it transformed the initial non-taxation of pensions received into a deduction from reference tax income (RFR).
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What could change if the bill is definitively adopted, as it stands, by Parliament
- For the paying parent alimony: nothing changes. Possible tax deduction.
- For the receiving parent alimony: the amount received can be deducted, up to a limit of 4,000 euros per child and per year and 12,000 euros per year. This deduction would influence the RFR. Therefore, even if this person is non-taxable, lowering his RFR would potentially offer him some advantages on the eligibility of social Security benefitsthe amount of scholarships or access to each energy for example.
As Aude Luquet specifies in the description of her bill, in fact, in nearly 70% of cases, custody of the children goes to the mother against not quite 20% to the father. The vast majority of pensions are therefore paid by the father to the mother following a divorce or separation.
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Does this text have a chance of being definitively adopted?
Mystery. Politically speaking, this consensual-looking text has already followed an astonishing path. Modem MP Aude Luquet tabled her bill on August 23, a text quickly supported by her Modem group, which is planning it for the parliamentary niche on October 6. Shortly after, she receives the support of the Renaissance group (the presidential majority) who co-signs his text… before withdrawing this co-signature.
Finally, the text was adopted on Thursday 6 October the almost unanimous (46 for, 1 against and 5 abstentions), by bringing together Nupes, RN and Nupes votes, but… this bill finally t adopted against the advice of the governmentand without the approval of the Renaissance group. The deputies of the Renaissance group, allies of the Modem in the majority, chose not to participate in the vote at first reading.
This measure would open a serious breach in the calculation of the RFR
If your objective increasing the purchasing power of middle-class single-parent families is fair and good, the instrument you have chosen cannot work, despite the merits of your approach, explained Olivia Grgoire, Minister Delegate in charge of SMEs. This measure would open a serious hole in the calculation of the RFR, from which no taxable income is currently subtracted.
Above all, even if the Bercy tenant did not insist on this point, the fact of having modified the text in committee – by creating an advantage for those who receive the pension without affecting the current advantage for those who pay the pension – create a new expense for the state. Clearly, this initially consensual and painless measure for the state coffers has become potentially expensive and the Modem lacks the support of its Renaissance allies.
The future of this bill therefore remains very uncertain.. Next step, the Snat, before returning to the National Assembly.