Last Year's Earned Income and Child Tax Credits Paid 4 Trillion Won to 4.57 Million Households

Kim Dae-ji, Commissioner of the National Tax Service, "Advance Payment by More Than a Month for Low-Income Households"

[Asia Economy Reporter Kwangho Lee] The National Tax Service announced that it paid 4 trillion won to 4.57 million households in three installments on the 19th, 24th, and 28th, more than a month ahead of the legal deadline (October 1) for the 2019 income year’s Earned Income Tax Credit and Child Tax Credit.

The current recipients include those from the regular May application period and the settlement of semi-annual applications from August-September last year and March this year.

Considering the Earned Income Tax Credit payments of 420.7 billion won in December last year and 596.2 billion won in June this year, the total payment to 4.91 million households amounts to 5 trillion won, which is similar in scale to last year’s 5.03 trillion won.

According to the review results, the average payment amount for the Earned Income Tax Credit and Child Tax Credit was 1.14 million won, with the Earned Income Tax Credit averaging 1.04 million won and the Child Tax Credit 860,000 won.

Among the recipient households, single-person households accounted for the largest share with 2.65 million households (60.8%), followed by single-earner households with 1.41 million households (32.3%), and dual-earner households with 300,000 households (6.9%).

In terms of payment amounts, single-earner households accounted for the largest share with 2.2654 trillion won (45.6%), followed by single-person households with 2.2423 trillion won (45.1%), and dual-earner households with 464.7 billion won (9.3%).

By income type, 2.74 million households (62.8%) had earned income, and 1.59 million households (36.5%) had business income.

Among earned income households, daily workers accounted for 1.48 million households (54.0%), which is 8 percentage points higher than regular workers at 1.26 million households (46.0%). Among business income households, personal service providers accounted for 1.07 million households (67.3%), followed by business operators with 520,000 households (32.7%).

This year, the first settlement was conducted for households that applied for the semi-annual Earned Income Tax Credit in August-September last year and March this year.

The amount received for the first and second half of the year is compared with the annual calculated amount; in cases of underpayment, additional credits are paid, and in cases of overpayment, the excess amount is deducted from credits payable over the next five years.

Furthermore, during the five-year period when credits are deducted, no penalties such as additional taxes or delinquency measures will be imposed.

The review and payment results can be checked via Hometax, Sontax (mobile application), an automated response system, and a dedicated tax credit consultation hotline.

If the eligibility requirements were met but the application was not submitted in May, late applications can be made through Hometax, Sontax, etc., until December 1.

Kim Dae-ji, Commissioner of the National Tax Service, said, "We advanced the payment by more than a month ahead of the legal deadline to support low-income households facing difficult economic conditions due to the novel coronavirus disease (COVID-19). We also strengthened non-face-to-face applications by introducing telephone proxy applications and simplifying electronic application procedures to prevent COVID-19 infections."

This content was produced with the assistance of AI translation services.