Income tax: as the 2021 reporting campaign opens, here’s what’s changing this year

Income tax: as the 2021 reporting campaign opens, here’s what’s changing this year

After an exceptional year 2020, marked by the Covid-19 epidemic, certain measures taken by the government during the management of the health crisis will have an impact on this 2021 declaration.

A tax notice from the Directorate General of Public Finances online on the Impot.gouv.fr website, on a tablet, in Mulhouse (Haut-Rhin), Tuesday April 6, 2021. (MAXPPP)

French households can start filing their income tax return. The Minister of the Economy, Bruno Le Maire, and the Minister of Public Accounts, Olivier Dussopt, officially launched this 2021 campaign on Thursday, April 8. This year again, it must be done online for most households, only those who cannot make an online declaration completing a paper declaration. For those who declare their income online, the deadline runs from May 26 to June 8, depending on the department of residence, against May 20 for the paper version.

For the second year, around 12 million tax households whose situation does not require rectification will not need to declare their income, their declaration being generated automatically by the administration. They won’t have to send it back if they don’t have any changes to make.

However, the measures taken in the context of the health and economic crisis have led to some new developments this year.

Exceptional exemptions

This year, professional expenses incurred for teleworking are exempt up to a limit of 550 euros per year.

In addition, the exceptional purchasing power bonus, known as the Macron bonus, paid by companies to certain employees in 2020, is exempt from income tax, up to 1,000 euros.

The same goes for the Covid premium, paid by certain administrations, in particular public health establishments, as well as by private health establishments or the social sector (up to 1,500 euros).

Finally, income from overtime worked during the period of the state of health emergency from March 16 to July 10, 2020, are also exempt up to 7,500 euros.

A stronger tax reduction for donations to associations

In addition, the government has also increased the tax reduction granted in the event of donations to an association to help the most deprived. It increases to 75% of the amount of the donation, with a ceiling of 1,000 euros.

However, to benefit from it, you must have made a donation to a declared association of general interest or to an association recognized as being of public utility.