Employment of a home-based employee, donations to associations, union dues or even children’s school fees: nearly 12 million households benefit from a credit or tax reduction system. How high is this tax benefit?
Three out of ten households. Tax credits and reductions are far from benefiting a privileged handful: more than 11.5 million households, or nearly a third of French people, benefited from them in 2021 according to the General Directorate of Public Finances (DGFiP), which has just unveiled detailed statistics on the 2021 tax on 2020 income. Overall cost for the State: 14.5 billion euros in 2021, i.e. 7 billion for credits and 7.5 billion for tax reductions.
Obviously, depending on the type of credit or reduction, the beneficiaries are not the same… and the amounts range from simple to tenfold, or even more! This is explained by the highly variable ceilings of these tax benefits, but also by their success with taxpayers.
Donations, home employment and school fees, winning trio
By lifting the veil on these statistics, the DGFiP thus underlines that, among the main tax credits, more than half of the amount disbursed by the State was for home employmentalso called personal services tax credit (home childcare, assistance for the elderly, household chores, etc.): this tax benefit benefited 4.28 million tax households last year, for a total amount of 4.75 billion euros, which represents an average tax credit of 1111 euros per household and per year.
A tax niche like rental investment pinel it benefits a smaller number of taxpayers (260,000 households) at a cost exceeding one billion euros (and double that if we count the previous measures Scellier and Duflot). Average annual reduction for eligible landlords: nearly 4000 euros per beneficiary.
| Main tax credits and reductions | Beneficiary households | Average amount per beneficiary household |
|---|---|---|
| tax credit work from home | 4.3million | 1111 per year |
| tax credit child care costs away from home | 1.8million | 620 |
| tax credit for union dues | 1.3million | 112 |
| Energy transition tax credit | 270000 | 1120 |
| Rent waiver tax credit Covid-19 | 90000 | 587 |
| Total tax credits | 7.7million | 913 per year |
| Specific taxation of foreign source income | 330000 | 6736 |
| Donations to organizations of general interest (66% reduction) | 3.4million | 371 |
| Donations to people in difficulty (75% reduction) | 1.7million | 234 |
| Rental investment Pinel | 260000 | 3990 |
| Rental investment Scellier | 170000 | 4122 |
| Rental investment Duflot | 30000 | 3591 |
| Overseas productive investments | 30000 | 15882 |
| School fees for children | 2.4million | 184 |
| Dependency costs | 230000 | 1174 |
| Total tax deductions | 6.7million | 1115 per year |
| Total tax credits and deductions | 11.5million | 1265 per year |
Source: DGFiP Statistics. 2020 income tax credits and reductions.
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Some tax credits are at the end of their life: the energy transition tax credit is thus gradually being replaced by MaPrimeRnov’. The DGFiP also notes the special case of taxation of foreign source income, categorized by the statistical service of the tax authorities among the tax reductions. This tax advantage costs 2.2 billion euros to public finances: This reduction avoids double taxation for people declaring their income abroad, explains the DGFiP in its study.
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Donations: 5million households benefiting from a tax reduction
The donations to organizations of general interest, which give right to a reduction of 66%, concern more than 3.36 million households, for an overall cost of 1.25 billion euros for the State. The average reduction resulting from a donation to these organizations is 371 euros. And 234 euros for donations to associations helping people in difficulty (reduction of 75% of the donation), which concerns 1.73 million tax households for 410 million euros in expenditure for the State.
Important reminder: this is a tax reduction and not a credit. A non-taxable household that gives an association therefore receives no tax benefit. According to the annual Research & Solidarities study, in France, around a quarter of donors are not taxable and thus give in a completely disinterested manner, fiscally speaking.
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