Advance for reductions and tax credits: will you perceive it as 8.7 million households on January 17?

For some, Santa Claus is regarding to make a second round. On Monday, January 17, a little over 8.7 million households will receive a tax reduction and credit advance (known as the “RICI” advance). With on average a tidy sum of 605 euros which will fill the accounts of these happy taxpayers. This amount normally corresponds to 60% of the total tax reductions and credits resulting from expenditure declared in spring 2021 for the year 2020: this concerns the employment of an employee at home, childcare costs. , nursing home accommodation costs, rental investment expenses (Duflot, Pinel, Scellier, etc.), donations and union dues.

The households concerned also received a document a few days ago in their private section on impots.gouv.fr specifying the exact amount they will receive. For the most part, this will take the form of a transfer labeled “AVANCE CREDIMPOT” directly to their bank account. But for some 235,000 tax households, of which the DGFiP (General Directorate of Public Finance) does not know the bank details, it will be necessary to wait until the end of January to see a precious check arrive by the Post Office.

Watch out for regularization

Be careful, however. The income tax return, which will be carried out in the spring and which will include the eligible expenses actually incurred in 2021, will allow the tax authorities to calculate the actual amount of tax reductions and credits to which each household is entitled. And thus proceed with the regularization in the summer. If the amount of the advance is less than the amount to which you are entitled, you will benefit from an additional payment.

Conversely, if the advance granted to you turns out to be greater than the amount to which you are entitled, you will have to reimburse the overpayment. This is the case, for example, if you stopped employing a cleaning lady in January 2021: the advance granted in January 2022 will then be resumed in the summer. To avoid getting there, the most far-sighted taxpayers were able, from September to December, to reduce or even cancel this “RICI” advance.

Instant tax credit is coming

This well-oiled mechanism, however, undergoes a major change from this year with the immediate advance of tax credits for most personal services. This optional and free possibility offered by Urssaf – from January for private employers and from April for those who call on a service provider – will make it possible to no longer wait up to eighteen months for the reimbursement of its tax credits. From this year 2022, the “RICI” advance on expenses incurred in 2021 and the immediate advance on expenses for 2022 will therefore coexist for personal services. In 2023, it will be the turn of services related to assistance to the elderly and disabled to be eligible for the instant tax credit. And it will be necessary to wait until 2024 for childcare outside and at home.

In this context, starting next year, the DGFiP and Urssaf will automatically exchange their information. History that the deposit on tax reductions and credits paid in January 2023 takes into account the immediate advance already received in 2022.