Income tax is an annual tax which affects all the income received by the members of the income tax household.
The income tax household, which makes it possible in particular to determine the number of shares used to calculate income tax, is composed, in addition to the taxpayer and his spouse or partner, of persons attached to the household in a compulsory manner (minor children) or not. (adult children, disabled or collected persons).
Tax rates increase with taxable income.
However, the tax is proportionate to the contributory capacity of each taxpayer by the system of the family quotient which takes into account:
- the family situation of the taxpayer,
- the number of persons dependent on the taxpayer.
The taxable income of the household is, in fact, divided by the number of shares, fixed according to the situation and the family expenses.
To the result obtained by dividing the net taxable income by the number of units, the progressive scale (corresponding to one unit). This tax is then multiplied by the number of shares used for the first transaction.
The reduction in gross tax resulting from the family quotient is however limited by the capping system.
| Ceiling of the reduction in gross tax resulting from the
applicable quotient for income received in 2021 |
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Principle of common law |
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parents
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Single, divorced or separated | €3,756 for the1st dependent child and for the other dependents:
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| €1,878 for 1/2 of each of the first 2 children only in the event of a shared charge. | ||
| Widowed | €6,548 for the1st dependent child Single | |
people who have had children
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€951 regardless of the age of the child | |
| Recipients of a pension provided for by the provisions of the code for military invalidity pensions and war victims for a disability of 40% or more |
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Widowed
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| Holders of a disability pension for an accident at work of 40% or more | ||
| Holders or parents of holders, counted as dependents, of the mobility inclusion card bearing the mention of disability or of the disability card | ||
| Holders of the combatant card or a pension paid under the provisions of the code for military disability pensions and for war victims aged over 74 | ||
1 – Number of shares in the tax household
The number of shares to be taken into consideration is determined according tofamily.
These shares make it possible to calculate the family quotient (taxable income divided by the number of shares) which reduces the progressiveness of the tax for taxpayers with family responsibilities.
| Number of dependent children | Married or civil partnership | Widowed (1) | Single and single parent |
| 0 | 2 | 1 | 1 |
| 1 | 2.5 | 1.5 | |
| 2 | 3 | 2 | |
| 3 | 4 | 3 | |
| 4 | 5 | 4 | |
| (1) taxpayers with dependent children benefit from the same number of shares as if they were married.
In addition, the year of the spouse’s death, the childless widower benefits from the marital quotient (2 shares) for the tax period running from the date of death to 31 December. (2) The single parent is entitled to an additional half share for his 1st dependent. |
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The number of units indicated in these tables may be increased by an additional half unit in the following cases.
2 – Calculation of the ceiling
To apply the ceiling, it is necessary to calculate the tax by retaining:
- on the one hand, the real family quotient of the taxpayer;
- on the other hand, one part for single, widowed or divorced persons, or two parts for married or PACS taxpayers.
It is then necessary to make the difference between these two results. Two cases can then arise:
the difference does not exceed the sum of the ceilings corresponding to all the additional half-shares to which the taxpayer is entitled in addition to his share (if he is single, widowed, divorced) or both shares if he is married or in a civil partnership.
In this case, there is no cap and the amount of gross tax is that which results from the operation described above;
- the difference exceeds the sum of the ceilings corresponding to all the additional half-shares to which the taxpayer is entitled in addition to his share (if he is single, widowed, divorced) or both shares if he is married or in a PACS: the gross tax is equal to that determined by withholding one share (widowed, single or divorced taxpayers) or two shares (for married or PACS taxpayers) minus the sum of the legal ceilings corresponding to all the additional half-shares to which the taxpayer is entitled.
3 – Main additional half-shares
3.1. Single parent with a dependent, a child taxed on their own or having had a deceased child
3.1.1. Single parent with a dependent, a child taxed on their own or having had a deceased child
An additional half-share is granted to a single parent or parent who has raised a child alone, under certain conditions.
3.1.1.1. Single person with a child taxed separately
Taxpayers who do not live together, without dependents, who have one or more adult children (married or civil partnership) or minors taxed separately, provided that they have exclusively or principally borne the charge for at least 5 years during which they lived alone.
3.1.1.2.parent
Single-parent households (single, divorced, separated) who have at least one dependent (child or disabled person) and provided that:
- the parent effectively supports, alone, the responsibility of the child(ren) (the fact that a alimony is paid to the single parent does not matter). The Council of State considers that the fact of assuming sole effective responsibility for the child must be assessed on a case-by-case basis taking into account the importance of the pension and the needs of the child, without referring to the amount of the flat-rate assessment of benefits in kind, which cannot in all cases constitute a maximum limit. ;
- The parent lives alone on January 1of the tax year.
3.1.1.3. Single person having had a deceased child
Single, divorced, separated and widowed, without dependents, who have had a child who died after the age of 16 or as a result of acts of war and who supported exclusively or mainly care of this child for at least 5 years during which they lived alone.
3.1.2. Invalids, combatants and recipients of war pensions
3.1.2.1. Holder of a disability pension or a disability card
A half share is granted if one of the spouses is the holder
- of: a military or war victim’s pension for disability of at least 40%
- , a disability pension for an accident at work of at least 40%,
- a mobility inclusion card bearing the mention of disability, or
- a disability card of at least 80%.
A share is granted if both spouses meet the previous conditions.
3.1.2.2. Holder of a veteran’s card or a military invalidity pension
Half a share is granted if one of the spouses is:
- aged over 74 on 31 December of the tax year,
- and holds a a combat card or a disability or war victim’s pension.
This benefit is also granted to widowed persons (surviving spouses) over the age of 74 on the dual condition that their spouse:
- has fulfilled the conditions referred to above, which assumes that he or she is dead at over 74,
- and has benefited from this additional half-share for at least one tax year.
From 2021, all surviving spouses, having reached the age of 74, can benefit from the additional half-share, once their husband or wife has received the combatant’s pension, regardless of the age at which he or she is or she died.
This additional half share cannot be obtained when married taxpayers benefit from an increase in the family quotient for the disability of one or both spouses.
Single persons holding a combat card or an invalidity pension, as well as holders of a war widow’s pension also benefit from an additional half share.
Example:
A divorced taxpayer lives alone with his 2 minor children for whom he is solely responsible. As such, he benefits from 2.5 shares of the family quotient: his share + 1 share for the 1st dependent child (increase in the quotient for a single parent) + 0.5 share for his second child.
In 2019, he received a salary of €70,000, which corresponds to a net taxable income of €63,000.
The tax resulting from the application of the scale corresponding to a net taxable income of €63,000 for a taxpayer benefiting from 2.5 shares is theoretically equal to €4,157.
The tax corresponding to a net income of €63,000 for 1 share: €12,906.
Due to the application of the family quotient, the taxpayer therefore realizes a tax gain of:
€12,906 – €4,157 = €8,749.
However, the gain resulting from the application of the family quotient is in his case capped at €3,704 for the first dependent child (single parent) + €1,570 for the second dependent child, i.e. in total: €5,274.
The taxpayer will therefore ultimately be liable for a tax of €12,906 – €4,157 = €7,780 (instead of €5,632 in the absence of a ceiling on the family quotient)
To find out more
Head to the Essential Tax on Income