Refunds from taxes: an explanation of the process
Ready to tackle tax season with ease? Here's all you need to know about avoiding unnecessary taxes, figuring out your refund status, and optimizing your benefits.
Tax Regularization
Tax regularization in France is the process of adjusting tax payments to exactly match your situation. It can occur throughout the year or during the annual income tax return. In the context of source deduction, employers or paying organizations collect taxes from your income, calculating the rate based on information from your income tax return, like the amount of income, potential tax credits or reductions, and family situation. If actual income is lower or higher than estimated, taxes may need to be adjusted, leading to either a refund or additional taxes owed.
How to Know if You're Eligible for a Tax Refund
To determine if you're eligible for a tax refund, check your income tax return submitted in the spring. You can also look at your tax notice of assessment (ASDR) on the impots.gouv.fr website between late July and early September.
Reasons for Tax Refunds
There are two possible causes for a tax refund:
- The source deduction rate from your income in the previous year exceeded the tax due. This can occur if there's an income decrease that wasn't reported or a delay in reporting the birth of a child that qualifies for an additional half share.
- You benefit from a tax credit for certain expenses that resulted in a refund of the balance. These expenses may include hiring a domestic employee, work to improve the energy performance of your home, childcare fees, donations to charities, or hiring an employee for maintenance or gardening work.
Activating the Immediate Advance of Tax Credit
The advance of reduction and tax credit is an amount paid to taxpayers benefiting from tax credits and reductions within the framework of the withholding tax. The advance is calculated based on the expenses declared in the tax return of the previous year, with a one-year delay. Not all tax reductions give rise to an advance – only certain tax credits concern this, like those for domestic employment and childcare expenses, donations, dependence-related expenses, overseas rental properties, and others.
To activate the immediate advance of tax credit, check all expenses giving rise to the tax credit in your tax return, and the advance will be automatically activated. The advance is generally paid in two installments: 60% in January, and the remaining 40% in the summer. If the advance received is too high, taxpayers can return the excess or change or cancel the advance beforehand.
Updating Your Banking Coordinates on impots.gouv.fr
If your bank details provided to the tax office have changed, update them promptly to avoid processing delays or inconveniences like fees. For your refund to be processed by the scheduled dates, the tax office must have your new bank details before July 1st. To update them, simply go to your personal space on the impots.gouv.fr website and follow the steps listed there.
Regularization and Refund of Overpaid Taxes
The tax refund by the tax office is scheduled during the summer period. It will be made on your bank account in the summer, with the exact date varying depending on the taxpayers. The refund is made directly by the services of the General Directorate of Public Finances (DGFiP) on the bank account whose coordinates you have communicated to them. Taxpayers who have not provided bank details will receive the refund by check.
Filing Your 2025 Tax Return for 2024 Income
The online declaration campaign on the impots.gouv.fr website for the 2024 income tax return usually opens in late April, offering taxpayers a simple and practical option to file their return. The deadline for online filing depends on your place of residence, while the deadline for paper filing via Form 2042 is May 20th.
Always ensure your banking and contact details are up to date with the French tax authorities to make the tax refund process as smooth as possible. Happy taxing!
[1] Source: france-activites.gouv.fr
- To optimize your personal-finance situation during tax season, consider activating the immediate advance of tax credit for certain expenses like hiring a domestic employee or donating to charities, as the advance is calculated based on the expenses declared in the tax return of the previous year.
- To ensure a smooth tax refund process and promptly receive your refund, keep your bank details updated with the French tax authorities by visiting your personal space on the impots.gouv.fr website, as the tax office schedules the refund during the summer period and makes the refund directly to the bank account whose coordinates you have communicated to them.
