On October 24, during the examination of the “revenue” section of the 2025 budget, deputies voted for the “Ehpad tax credit” during a public session at the National Assembly. This system would replace the current one, which is limited to a “tax reduction”. What is the difference between these two measurements? What budgetary impact for the State? What are the chances that the project will be definitively approved? Explanations.
Could the Ehpad tax credit see the light of day?-sabinevanerp-pixabay.jpg
Tax credit VS tax reduction… What are the differences?
The tax reduction is a sum deducted from the amount of tax owed by the taxpayer… It can, for example, be generated by donations to organizations of general interest. It only applies if there is, in fact, a tax to pay. On the other hand, the tax credit is a sum subtracted from the amount of tax, which may be subject to reimbursement if it does not exceed that of the tax, or that the beneficiary of the tax credit n is not taxable.
What about nursing home costs?
Currently, the dependency and accommodation costs of people accommodated in accommodation establishments for dependent elderly people (Ehpad) or in long-term care units (USLD) are subject to a tax reduction. However, this tax reduction reaches 25% within the limit of 10,000 euros of expenses, i.e. a maximum benefit of 2,500 euros. Problem: it therefore only benefits taxable persons! With a tax credit, non-taxable dependent persons could receive a transfer from the tax authorities. It is with this in mind that the socialist MP Christine Pirès Beaune has been advocating for several years to transform this tax reduction into a tax credit… “We cannot, in the same nursing home, have people who have a pension of 3,000 euros who therefore do not need tax assistance (…) and, alongside, people who have less than 1,000 euros in retirement, and who do not have this tax assistance”, she pleaded again this year. But if parliamentarians give the green light, the measure will be costly… The tax credit could in fact represent three times more than the tax reduction; which would have already cost 272 million euros in 2023… A bias difficult to combine with the 2025 budgetary constraints, and which therefore received an unfavorable opinion from Laurent Saint-Martin, Minister of Budget and Public Accounts, before the adoption of the amendment. “Basically, I cannot be insensitive to Christine Pirès Beaune's idea, but, as general rapporteur, I ask myself the question of how we [la] finance?”, for his part, questioned Charles de Courson, general rapporteur of the Finance Committee. The cost of transforming the tax reduction into a tax credit would amount to “880 million euros”. Already adopted by the National Assembly at first reading in 2022 and 2023, this measure has never been completed, due to the use of 49.3 made by Elisabeth Borne within the framework of her finance laws. Could it be that the measure faces the same type of blockage this year…?
