What is a tax household in France?

From parts fiscales to quotient familial—the different French terms concerning your tax filing status may have your head spinning. Yet understanding your tax household (foyer fiscal) will help you file your taxes correctly each time—and could save you real money. That’s why N26 is here to give you the most important information on optimizing your tax return based on your household composition.

A tax household (foyer fiscal) is a term used by the French tax authorities to designate everyone registered on the same tax return. The composition of a tax household is used to calculate the personal tax shares that apply to it. The sum of these shares make up the family quotient, which defines the taxable amount.

A tax household can consist of the following:

• A single person (single, widowed, divorced, or cohabiting)
• A single person with one or more dependent children
• A married couple (or one in a civil union)
• A married couple (or one in a civil union) and any dependent child(ren)

Minors and/or disabled adult children are part of their parents’ tax household. However, there are several exceptions to these rules:

• Those under 21, or 25 if they’re studying, may remain part of their parents’ tax household.
• Minors with incomes that allow them to support themselves may file alone, if desired.
• Couples in the first year of a marriage or a civil union may still need to file separately.

If you fall into one of these categories, you’ll need to apply for an exception and attach your application to your return. 

If your adult child is part of your tax household, they’ll have to write an official statement attesting to this on plain, white paper. This document must be kept by the parents in case the tax authorities request it.

The attestation should read something like this:

“Date”

“Je soussigné(e) (nom, prénom, adresse, profession ou qualité, date et lieu de naissance) demande à être rattaché(e) au foyer fiscal de (mes parents, ma mère, mon père)”. 

“Signature”

Keep in mind, though—a tax household isn’t the same as a tax residence (ménage fiscal). In France, a tax residence is defined as the people living in the same dwelling. For example, an unmarried couple living under the same roof thus constitutes a tax residence, but two separate tax households. The two cohabitants will have to file two different tax returns, but one may pay the property tax, for example. Conversely, a student under 25 years of age living in their own home can be part of the same tax household as their parents, but they’ll form a separate tax residency, since they live in their own home.

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A personal tax share is a unit of one person in a tax household. Calculating the so-called “family quotient” is essential for determining how much your tax bill will be (see below).

Do you want to calculate how many people belong to your tax household? Here’s how these shares are determined, depending on your household composition:

• A single person counts as 1 tax share
• A married couple or one in a civil union is composed of 2 people, i.e. 2 tax shares
• A married couple (or one in a civil union) with one dependent child represents 2.5 tax shares
• A married couple (or one in a civil union) with two dependent children represents 3 tax shares
• A married couple (or one in a civil union) with three dependent children represents 4 tax shares
• A married couple (or one in a civil union) with four dependent children represents 5 tax shares
• Starting from five children, each additional child represents 1 tax share
• A single, divorced, or widowed person with one dependent child represents 1.5 tax shares
• A single, divorced, or widowed person with two dependent children represents 2 tax shares
• If a single, divorced, or widowed person has three children or more, each additional child starting from the third represents 1 tax share

In case of joint custody (garde alternée), this is calculated differently.

For married couples (or those in a civil union) or for a widowed person:

• One dependent child represents 2.25 tax shares
• Two dependent children represent 2.5 tax shares
• Three dependent children represent 3 tax shares
• Four dependent children represent 3.5 tax shares

For a single, separated, or divorced person:

• One dependent child represents 1.25 tax shares
• Two dependent children represent 1.5 tax shares
• Three dependent children represent 2 tax shares
• Four dependent children represent 2.5 tax shares

Some exceptions exist, allowing you to add extra half shares. People holding a disability card, a war injury card, a military pension, or a veteran’s pension, as well as people over 74 years of age get an additional half share.

Here's how to calculate your family quota (Quotient familial):

Divide your net taxable household income by your number of tax shares

This formula is used to calculate various social benefits—such as the ones provided by the CAF (Caisse d’allocations familiales)—but also to calculate the tax rate of a residence for tax purposes. 

To put it simply, the higher the number of tax shares, the lower the family quota. The lower your family quota, the lower your taxable income is. The lower your taxable income, the less taxes you’ll owe.

For example, let’s say a married couple has a taxable income of €100,000 and two dependent children. This means they have 3 tax shares. Their family quota is calculated as follows: 100,000 / 3 = 33,333. So, this couple will be taxed on €33,000, rather than €100,000. For more information on the tax schedule, you can visit the government website.

Are you 18 or over and wondering if you should file your own tax return or remain part of your parents’ tax household?

Parents should carefully consider whether or not to include their adult child as part of their tax household. There are two options here:

• Keep your child part of your tax household (if they’re under 21, or 25 if they’re a student) so you can keep benefiting from an additional half-share (or one share per child if you have three or more children). You’ll have to include your child’s income in your return, though.
• Remove your child from your residence for tax purposes and pay tax-deductible child support to them directly (don’t worry, they won’t be taxed on these amounts).

In both cases, ceilings exist, depending on the tax bracket you fall into and the composition of your tax household. You can find more information here.

Keep in mind—removing children from a tax residence is generally worthwhile for couples with two children who are taxed on their income at a level of 41% or 45%. For couples with three children, it may make more sense to keep a child over 18 part of their residence for tax purposes, as the third child represents a full tax share (and not a half share). Finally, if the child is working and earning a substantial income, it usually makes more sense for them to be separate for tax purposes.

Do you want to apply to file in a separate tax household from your parents? Here’s what you need to do:

• Fill out form 2042 if this is the first time you’re reporting income. If you’re a student, here are the steps you need to take.
• If you’re 20 years old and were part of your parents’ tax household the previous year, you must declare your income online via your personal space.

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