Personal Services Through an Intermediary: Extending the Instant Tax Credit

The Personal Services Tax Credit Immediate Advance applies to individuals using personal service organizations (service providers, agents or connectivity platforms) from June 14, 2022.

This is the second phase of the implementation of the deployment of an immediate upfront tax credit for expenses incurred for personal services. Originally scheduled for April 1, its application was delayed due to technical reasons.

Immediate advance tax credit applied by service providers

From mid-June, the instant tax credit should be available to individuals who use service organizations as service providers, agents or network platforms.

These professionals must connect to a specific application to manage the exchange with Urssaf. They can then offer individuals invoicing that includes an immediate tax credit. This service optional and free.

Instant tax credit for selected employers directly

The instant or immediate tax credit has already benefited individual employers through the Cesu+ service since January 1, 2022. It is applied every month to all expenses (wages and fees).
To use this service, the employer and employee must jointly sign the form and provide their bank details. After filing the declaration, the employer pays only wages and expenses minus the tax benefit. This reduces the monthly financial burden for the individual employer. It is Urssaf that is responsible for paying the worker his wages. If it is taxable, it receives the “net” amount minus the withholding tax rate.

Personal Services: Tax credit for all taxpayers

Personal services entitle you to a tax credit corresponding to reimbursement of 50% of expenses incurred (including wages and social contributions), up to 12,000 euros per year and per tax family expenses (excluding surcharges). For some services, the spending ceiling is lower: €500 per year for “small do-it-yourself jobs” (less than 2 hours per intervention), €3,000 per year for IT and Internet assistance, and €5,000 per year for small garden work.

The tax credit is beneficial to all taxpayerstax-free or subject to tax. If the tax benefit exceeds the tax payable, the excess is reimbursed by the tax authorities.

The immediate promotion of the tax credit is well received by the French. According to one survey conducted by Ifop for La Maison des Services à la personne from March 29 to March 31, 2022 (out of a sample of 1002 people, representative of the French population over 18), this system is perceived as a favorable measure for job creation (62%), positive for purchasing power (60%) and which may encourage the French to use personal services (57%). It should be noted that only 18% of households report using personal services (childcare, cleaning, gardening, helping the elderly, etc.).