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Tax credit and income tax calculation. Tax credits and withholding tax remain important in the calculation of your income tax, even if withholding tax was introduced in France in 2019. As part of these regularizations, we have established that we will pay directly to your bank account in July 2019 tax credits accumulated in 2018.
We would like to emphasize the importance of tax credits in calculating income tax. However, for specific tax credits, such as childcare for children under 6 years old, EPHAD charges, charges linked to rental investment, donations to associations, and personal services (such as employment of domestic staff), we will pay a deposit equivalent to 30% of 60% of the tax credit due to you from January 2019. It is important to note that this list is not exhaustive, and the other tax credits will be paid to you six months later. This is particularly crucial for individuals who are not subject to tax but who may benefit from tax credits.
If you belong to this category and wish to avoid the deduction in 2019, you had to prove that your reference tax income was less than 25,000 euros per individual unit and that you were not taxable either in 2017 or in 2018. This unique system was put in place to accommodate non-taxable persons and ensure them the benefit of the tax credits to which they are entitled.
Tax credits play a vital role in reducing the overall tax burden on individuals, providing them with financial relief and incentives for various expenses, such as childcare, medical care, rental investments and charitable contributions. Understanding the specific rules and payment deadlines for tax credits is essential to effectively managing your finances and ensuring you receive the benefits to which you are entitled.
To ensure that you receive the tax credits due to you, we recommend that you stay informed of any changes in tax laws and regulations. Consulting a tax professional or using online resources provided by tax authorities can help you navigate the complexities of the tax credit system and make informed decisions about your financial planning.