Great news for many seniors in France: the tax allowance for those over 65 is being increased in 2025, meaning lower tax bills for many people when they file their 2024 income tax returns this spring. Here’s everything you need to know about this tax allowance, who qualifies, and how the changes affect your 2024 tax declaration.
What is the Over-65s Tax Allowance?
The over-65s tax allowance is a deduction from your taxable income that helps reduce the amount of income tax you owe. For 2024 income, this allowance will be applied when you file your tax return in spring 2025.
This allowance is part of a series of tax mechanisms the French government uses to ease the financial burden on certain groups. If you’re over 65 (as of December 31, 2024), or you have a disability with a rating of 80% or higher, you may be eligible for this allowance. It helps lower your overall taxable income before the tax bands are applied, so you pay less tax.
Increase in the Allowance: 1.8%
This year, the over-65s allowance and the income ceilings that determine eligibility have been increased by 1.8%. This increase is in line with the inflation rate for 2024, as calculated by Insee (France’s national statistics institute).
This adjustment means your income tax will not increase due to inflation. Without this increase, the tax brackets would have stayed the same, and inflation would have pushed more people into higher tax bands. Thankfully, thanks to the Bayrou government’s decision to adjust the tax bands, those who qualified for the allowance last year (and whose income did not rise in line with inflation) will actually pay less tax in 2024. Some people might even find that they have no income tax liability at all and will receive a refund if tax has been deducted at source.
How Does the French Tax Allowance for Over-65s Work?
To benefit from this allowance, your net taxable income (revenu net global) must be below certain income ceilings. For 2025, here are the updated income thresholds and the corresponding allowance amounts:
- Net income below €17,510: You’ll receive an allowance of €2,796.
- Net income between €17,510 and €28,170: You’ll receive an allowance of €1,398.
- Net income above €28,170: You do not qualify for the allowance.
These allowances double for couples who are subject to joint taxation (married or PACSed couples) and both meet the age or disability conditions. Note: There is no additional allowance for individuals who are both over 65 and disabled—it only counts once, based on either your age or your disability.
Who Else Qualifies for This Allowance?
In addition to people aged 65 or over, the allowance also applies to:
- People with a disability who have an official disability rating of 80% or higher.
- People receiving a work accident or military pension who have a disability rating of 40% or higher.
- Those who qualify under the disability category must have a ‘mobilité inclusion’ card to prove their status.
What Do You Need to Do to Benefit?
The great news is that you don’t need to take any extra steps to benefit from this allowance. The tax authorities will calculate and apply the allowance automatically once you submit your income tax declaration in the spring.
For individuals who qualify under the disability heading, make sure you have your ‘mobilité inclusion’ card or work accident/military disability pension documentation ready, as these will be needed to confirm your eligibility.
Keep in Mind: Disability Benefits Are Taxable
It’s important to note that disability benefits are considered taxable income and must be declared when you file your taxes. Make sure you include any disability payments you received in 2024 on your tax return.
What Does This Mean for Your 2024 Tax Return?
For over-65s and those with qualifying disabilities, the increase in the tax allowance and the higher income ceilings mean you’ll have lower taxable income, potentially resulting in lower taxes for 2024. If you qualify, you might even end up with a refund if tax has already been deducted at source.
So, if you’re 65 or older, or if you have a disability, make sure to check the updated tax allowance and ensure you’re taking full advantage of these changes when you file your tax return in the spring.
Disclaimer: The information provided in this article is for general informational purposes only and does not constitute legal, financial, or tax advice. While we strive to ensure accuracy, tax regulations and exchange rate policies are subject to change, and interpretations may vary. Taxpayers are encouraged to consult a qualified tax professional or the French tax authorities for guidance specific to their situation. We accept no liability for any errors, omissions, or reliance on the information provided.
This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.
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