What's new for the 2021 tax return

The opening of the 2021 tax return is marked by certain changes and the renewal of certain exemptions or tax credits. The following are the key developments for the 2021 income tax and expense return.

Mileage scales 2022 for cars and two-wheelers

If you are traveling by car for business purposes and you choose to use the real deductible expenses system, you can estimate your 2021 business travel expenses using the new mileage rates for cars and two-wheelers published in February 2022 at Official Journal. Faced with rising prices at the pump, the kilometric allowance scale is being increased by 10% for the 2021 income tax year. Read the news brief “ Business expenses: 2022 mileage scales for cars and two-wheelers ”.

You can calculate your mileage charges using the simulator Department of Finance.

Tax-exempt exceptional purchasing power premium

The exceptional purchasing power premium

Pepa

, known as the Macron premium, which was paid between 1^er June 2021 and March 31, 2022 to employees who received gross remuneration below 3 times the Smic in the 12 months preceding payment of the premium shall be exempt from income tax up to a maximum of €1,000.

The premium is exempted up to €2 000 in companies that have signed an incentive agreement or in companies with less than 50 employees or for workers in the second line if an agreement to develop their jobs has been concluded.

See the backgrounder What is the exceptional purchasing power premium? and the news brief “ With the increase in the minimum wage, the exceptional purchasing power premium concerns more employees ”.

Tax-free long-term mobility package up to €600

Since May 2020, an employer can cover all or part of the travel costs of its employees when they use an alternative means of transport (bicycles, electric scooters, carpooling...). This support, known as a long-term mobility package, is exempt from tax and social contributions up to a maximum of €500 per year per employee. Since 25 August 2021, this ceiling has been raised to €600 in the case of the combination of the long-term mobility package with the employer's assumption of the public transport or self-service bike subscription.

Read the news brief Entry into force of the Sustainable Mobility Package.

Tax-exempt inflation allowance

To cope with rising energy and fuel prices, employees, the self-employed, pensioners, beneficiaries of the SSA or Disabled Adult Allowance who earned less than €2,000 net monthly in October 2021 received an inflation allowance of €100.

This premium is tax-free. You don't have to mention it on your tax return if you received it in December 2021. Check out the news brief: 100 Euro Inflation Allowance: who can receive it and when? and Inflation premium not received: check if you are entitled to it and apply!

Tax exemptions for professional telework expenses incurred in 2021

In 2021, telework was still widely practiced to combat the COVID-19 outbreak. This often generates costs for employees. Exemption from employer-paid telework allowances is extended for 2021. Flat-rate allowances are exempt from income tax, up to a maximum of €580 for the year. Taxpayers opting for the deduction of business expenses for their actual and justified amount will be able to deduct telework expenses either up to a limit of €580 or for their actual amount if this is more favorable for them. Read the news brief Telework: tax exemptions for business expenses incurred in 2021.

Tax credit for installing an electric car charging station

Taxpayers who equipped their primary or secondary residence with an electric vehicle charging system in 2021 benefit from a tax credit equal to 75% of the amount of supply and installation expenses, up to a limit of €300 per charging system. It is granted without income condition to owners, tenants and occupants free of charge of their accommodation. It is limited to one charging system per dwelling for a single person, and two for a married or former couple subject to common taxation.

This tax credit is created for expenses incurred between 1^er January 2021 and December 31, 2023.

See the backgrounder Income Tax - Installation of Electric Vehicle Chargers (Tax Credit).

Donations to associations: extension of the 2022 tax deduction limit to €1,000

Donations to aid organizations for the most deprived who provide free food or medical care or who promote housing for people in difficulty, in France and abroad, benefit from a tax reduction corresponding to 75% of the donations paid, up to a limit of €1,000.

Once the ceiling of €1,000 is reached, the surplus falls back into the ordinary system with a 66% tax reduction. Read the news brief Donations to associations: extension of the limit to €1,000 of the tax deduction for 2022 and 2023 and the factsheet Income tax - Donations to general interest associations and organizations.

Tax reduction increased to 75% for donations to cultural associations

The rate of the tax reduction for donations made between 2 June and 31 December 2021 to religious associations or public institutions of recognized faiths in Alsace-Moselle is increased from 66% to 75% up to a maximum of €554. Donations made before June 2, 2021 or exceeding the €554 limit are eligible for the 66% tax reduction up to 20% of taxable income.

Consult our factsheet Income tax - Donations to general interest associations and organizations.

Tax credit for first subscription to a newspaper article extended in 2022

For your 2022 tax return on your 2021 income, you will be able to report expenses incurred as part of a first subscription to a political and general information print or digital media purchased from May 9 to December 31, 2021, for a minimum of 12 months.

This tax credit is equal to 30% of the expenses incurred for the subscription, without any income condition. It shall be granted once for the same tax household. If this amount exceeds the tax due, the excess will be returned to you. The amount of the subscription must be declared on form 2042 RICI.

Check out our news brief Tax credit for first subscription to a newspaper article extended in 2022 and our factsheet Income tax - First subscription to a newspaper or general press service (tax credit).

The Home Office Employee Employment Tax Credit extended to out-of-home services

Services rendered outside the home (accompanying children on the journey between school and home or at the place of an extracurricular activity, deliveries of meals or errands to the home of an elderly, disabled or chronically ill person), provided that these activities are included in a package of services subscribed by the taxpayer including activities carried out at his residence, are eligible for the tax credit for employment at home. By way of exception, teleassistance and video-assistance services purchased for the benefit of elderly or disabled persons are eligible for the tax credit even if they are not included in a set of services provided at the residence. See the backgrounder Income Tax - Home-based Employee Employment Tax Credit.

Maintenance of ISCED in case of advance payment or quote accepted before 2021

If you did insulation work on your main home before January 1, 2021, or if you spent money to make it more energy efficient, you can benefit from a green transition tax credit (ETTC). The ISCED provisions applicable in 2020 also apply to expenses paid in 2021 at the request of the taxpayer and if the taxpayer can show proof of acceptance of a quote and payment of a deposit made between January 1, 2019 and December 31, 2020. This tax credit is granted on a means-tested basis.

See the backgrounder Income Tax - Energy Transition Tax Credit (ISCED).

Half-share for widows of veterans

The conditions for the allocation of the additional half tax share are relaxed. Widows of veterans over the age of 74 as of December 31, 2021 (born before January 1, 1948) whose spouse was receiving the veteran's pension, are eligible for an additional half share, regardless of the age at which the deceased died (before or after age 74).

Consult I am a veteran, or does this change my tax? on the website impot.gouv.fr.