Home employment: the amount of your immediate capped tax credit advance?

Very bad news to fear for the 800,000 individuals who benefit from the immediate advance of tax credit on their expenses for employing an employee at home. Since January 2022, they can only pay 50% of their costs for childcare, school support, assistance for the elderly, home maintenance or housework, etc. The remaining 50% is covered through a tax credit. And this, within the limit of 12,000 euros of expenses, or 6,000 euros of tax advantage. But this advance risks being capped from January 1, 2024.

As a reminder, recourse to these home employment expenses opens the right to a 50% tax credit: the individual can recover half of the sums he incurs within a limit of 12,000 euros per year (15,000 euros if the household has two dependent children and even 20,000 euros if a person in the tax household has a disability card). The tax credit can therefore reach a maximum of 6,000 euros (or 7,500 euros with two children and 10,000 euros in the event of disability).

By activating the immediate tax credit advance, the individual only pays 50% of the bill per month, the balance being paid directly by Urssaf. A very practical mechanism for the cash flow of individuals in view of the system in place before 2022. Because before this date, the individual employer was reimbursed half of the costs advanced in two installments, the year following his home employment expenses ( 60% in January and 40% in August).

A new ceiling of 3,000 euros, or even less?

Problem: a new ceiling could constrain individual employers who benefit from the real-time tax credit. A document from the Social Security Directorate (DSS), presented on September 4, states that a new limit of 3,000 euros per year will be put in place from 2024. Once this threshold is reached (for 6,000 euros expenses, therefore), the individual would return to the system “classic” and would advance the sums which would not be reimbursed until the following year.

Worse still: the annex of 9 of the Social Security financing bill for 2024 (PLFSS) goes much further and mentions a ceiling of only 1,200 euros of tax credit advance per year (i.e. 2,400 euros of expenses). This means that beyond 200 euros spent per month, the individual could no longer benefit from the immediate advance.

“Households would not understand the capping of a system that they favor and to which they have become accustomed, especially at a time when purchasing power is reduced, and their end of the month is complicated”, deplores Marie Béatrice Levaux, co-president of the Federation of Individual Employers of France (Fepem). This would indeed be a big blow to the monthly household budget. Fepem thus underlines that with an expenditure of 600 euros per month on home help (extracurricular support and employment of a cleaning lady, for example), the individual employer would exhaust his immediate advance after only four months if this this was capped at 1,200 euros (300 euros tax credit for 4 months). For the remainder of the year, the household in question would therefore have to pay 600 euros per month again, instead of 300 euros, while awaiting reimbursement the following year.

A measure to combat fraud

For its part, Bercy affirms that “nothing has been stopped” concerning a new cap on the real-time tax credit. But emphasizes that only 80,000 households currently exceed the ceiling of 3,000 euros in immediate advance per year. So many households who will continue to benefit from the tax credit regardless… but not in real time.

Above all, the Ministry of the Economy and Finance justifies the possible lowering of the immediate advance ceiling by the fight against fraud. From the end of 2022, cases of fraud have in fact been detected by Urssaf, for an amount estimated between 3 and 5 million euros by the Department of Social Security, or a maximum of 0.09% of the total cost of the tax credit, estimated at 5.4 billion euros in 2021. False structures or companies offering personal services would have benefited from the immediate advance system, by illegitimately receiving the part paid by the Urssaf. The idea would therefore be, to limit the amount of fraud, to do the same with the amounts paid as the tax credit advance. A decision that would come back, deplores Marie Béatrice Levaux, “to make individuals pay for fraud”.