The income declaration period, which should start from the first week of April, leads parents every year to wonder about the tax treatment of an adult child. Two options are indeed possible. Parents can choose to detach an adult child for tax purposes and deduct the pension paid to them from their income. They can also keep the child in the tax household and benefit from an additional half share, but in this case the benefit is capped.
To determine the most attractive option, calculations must be made based on the ceiling for the deduction of alimony and the ceiling for the tax reduction resulting from the application of the family quotient. These two amounts change every year. Regarding alimony, the deductible limit has been increased from €6,042 last year to €6,368 for 2023. As for the tax reduction ceiling, it has been increased from €1,592 to €1,678 per half-share.
The principle of attachment
An adult child can be attached to the tax household of the parents if he is under 21 on 1 January of the year concerned or if he is under 25 and pursuing studies.
For a single child, the parents can then continue to benefit from an additional half share (or even 1 share if they have at least 3 children). In return, they will have to include any income received by their child. But the benefit provided is capped at €1,678 per additional half-share (compared to the tax for a 2-share household with equivalent income).
The alternative of alimony
Another solution allows parents to detach their child for tax purposes and to deduct from their income the sums paid to them to meet their needs (schooling, food, health, rent, etc.). This pension will be a maximum of €6,368 (approximately €530 per month) to be deducted from the income declared for 2022. If this is the only income of the child, he will not be taxable.
If the child is domiciled with you, you can deduct the lump sum of €3,786 per child for accommodation and food without any proof being necessary. If you deduct the total ceiling of €6,368 per child, other expenses such as tuition or health costs are applicable (up to €2,582) but for their actual amount and with supporting documents.
Tax implications
Let’s take the example of a couple with an adult child studying, with no income other than the support provided by their parents. If this couple opts for the attachment, their 2022 tax will be calculated on the basis of 2.5 shares, with a benefit capped at €1,678.
In the case of the payment of a pension, this couple will only benefit from 2 shares but their taxable income will be reduced by the pension paid to the child, within the limit of €6,368.
Calculation according to tax brackets
As shown in the following table, the tax detachment of children is generally more attractive. In the 30% bracket, the payment of a pension of €6,368 saves €1,910 in taxes, for example. Opposite, the advantage provided by the half-share in the event of attachment is limited to €1,678. Hence a gain of €232.
The interest of detachment is even more evident in the higher brackets. For a household taxed at 45%, the gain could approach €1,200.
In the 11% bracket, posting will rarely be profitable since the deduction of €6,378 only saves €700 in tax. However, in this category of income, the advantage offered by the additional half share does not reach the ceiling of €1,678. It may therefore be useful in this case to make a tax calculation simulation.
| Source: Money & You | ||
| Marginal tax bracket | Advantage linked to the deduction of a pension (tax detachment) | Maximum advantage of the half-share (tax attachment) |
|---|---|---|
| 11% | 700 € | 1.678 € |
| 30% | 1.910 € | 1.678 € |
| 41% | 2.611 € | 1.678 € |
| 45% | 2.866 € | 1.678 € |
Bonus from 3 children
Large families must be careful because the third child (like the following ones) grants not a half share but an additional share. The fact of attaching a child can thus offer up to 3,356 € of tax advantage (twice 1,678 €). Keeping a child in your tax household can therefore be more advantageous.
Make simulations by integrating all the parameters
The advantage of opting for one or the other of the solutions and the extent of the savings made therefore depend on the income of the parents but also on the composition of the household. The easiest way is to do your calculations beforehand, for example with the simulator made available by the tax authorities. It should also be noted that even if it is generally less attractive from a strict tax point of view, the attachment can allow parents to continue to receive aid or to benefit from relief which depends on the composition of the household (number of tax shares ).