how to deduct your child care expenses

Among the expenses giving rise to the right to tax credits and reductions are childcare costs at the crèche, at the nanny’s and even at the leisure centre. What are the conditions to meet? What is the ceiling for expenses retained? Our answers and information relate to the declaration of income.

Do you have dependent children in 2015 or in subsequent years? You make them keep, out of home, in a crèche, a drop-in center or with a nanny? The tax authorities will allow you to benefit from a tax credit on the amount of tax paid, corresponding 50% of expenses incurred during the tax year for registration and custody itself of this child under 6 years old. Any public aid (such as the CMG, additional free choice of childcare paid by the CAF) or private aid received (paid by a works council for example) must be deducted from this amount.

You are eligible for this tax credit if you have your children looked after:

• by an approved childminder,
• in a collective, parental or family crèche,
• in a nursery,
• in a kindergarten,
• (if your children are under 6 years old on 1 January 2021 but are already in school) in a pre-school daycare center or a leisure center without accommodation.

In addition to childcare costs strictly speaking (net salary towards + social security contributions paid to Urssaf), the amount of maintenance allowances (which cover the costs incurred for the purchase or maintenance of educational materials, water, electricity, heating of the childminder’s home) is also taken into account, but within the limit of 2.65 euros per day on duty. On the other hand, meal expenses should not be declared.

Tax return: the 10 most common errors

A tax credit of 1150 euros maximum per child cared for

The total expenditure taken into account by the tax authorities is capped 2,300 euros per year per child, i.e. a maximum tax credit of 1,150 euros per dependent child entrusted to a childminder or crèche. In the event of joint custody, this ceiling is divided by two for each of the parents, ie 1150 euros of expenses covered and 575 euros of maximum tax credit.

Example: you incur 6,000 euros in annual costs to pay for your child’s childminder. The free choice supplement paid to you represents 4,000 euros annually. The expenses taken into account are therefore 2,000 euros, and the tax credit will be 1,000 euros (500 euros per parent in the event of joint custody).

Note: as this is indeed a tax credit, and not a tax reduction, if the amount of your tax is less than the amounts you are authorized to deduct, the tax authorities will refund you the difference. Moreover, this tax advantage is granted to all taxpayers who are parents, it is not necessary to have a professional activity to benefit from it.

The procedure for declaring out-of-home care expenses

First step: bring the expenses incurred to the attention of the tax authorities, as part of your income tax return. Tax reductions and credits of this type are thus collected in the tax reductions and credits section of the online declaration, or on the appended form 2042 RICI in the case of a paper declaration.

You must then fill in the amount of the expenses and the coordinates of the beneficiaries. in boxes 7GA (1st child), 7GB (2nd child) and 7GC (3rd child) of the 2042 K declaration form. box corresponding to the child concerned. This is not the case, however, for any daycare or leisure center costs. In the event of joint custody, boxes 7GE, 7GF and 7GG must be completed.

If this is the first time you are declaring childcare expenses, remember to specify it at the beginning of the online declaration, in order to generate the appropriate entry screen. If you forgot, you can always go back.

Prefilled amounts? Nope! Only pre-filled

Pay attention to the misunderstanding. In order to facilitate the entry of your declaration, the data (amount of expenses and identity of the employees) relating to the expenses incurred for the care of children under 6 years of age and the expenses incurred for the employment of an employee at home, declared via simplified devices Pajemploi and Cesuare automatically present, specifies the DGFiP in its notice. But are these salaries paid pre-filled? No. Only presented automatically next to the box to be filled in: you must necessarily report this amount yourself if you want to benefit from this tax credit.

Namely, for employer parents, Pajemploi called every year, mid-April, a tax return document which gives the exact amount reported in your tax return. It is this amount that is pre-populated.

The impact of this declaration on the withholding tax

Since January 2019, income tax has been deducted at source, directly from wages, pensions, allowances… This does not change anything, however, in the conditions of access and the methods of declaration of the tax credit. on childcare costs.

With this mode of perception, the deduction is done in 2 stages. Every year in mid-January, the households concerned receive a deposit equivalent to 60% of the tax credit for the previous year. The rest is then transferred in July, at the time of the balance of the tax.

If you did not declare child care expenses in 2021, you did not receive the deposit in January. The entire tax credit will therefore be paid to you in July.

If, on the other hand, you no longer have at all or no longer as many childcare expenses to declare for 2021, in particular if your children have reached the age limit, you will need to return any overpayment of the advance received in January. This amount, indicated on your 2022 tax notice, must be paid in one installment next September if it is less than 300 euros, or in several installments from September to December if it is higher.

In addition, the information provided this year in your 2021 income tax return will be used to calculate the tax credit advance that will be made to you in January 2023.