Low-Income Households to Receive Up to 1.05 Million Won in Earned Income Tax Credit

National Tax Service Sends Earned Income Tax Credit Application Notices

[Sejong=Asia Economy Reporter Kim Hyunjung] Low-income households with earned income in the second half of last year will receive an earned income tax credit of up to 1.05 million won.

The National Tax Service announced on the 2nd that it has sent earned income tax credit application notices to 1 million low-income households. Notices were sent by mail to those aged 65 and over, and via mobile to those under 65. Applications can be submitted through ARS phone, Hometax, or Sontax by the 15th, and due to the impact of COVID-19, tax office application counters are not being operated.

The tax credit will be paid at the end of June after review. If you miss the application deadline of the 15th, you can apply during the regular earned income tax credit application period in May (May 1?31). If you have business or religious income in addition to earned income, you must apply in May, not this time.

The earned income tax credit pays 35% of the annual calculated amount, with a maximum of 1.05 million won based on the second half of 2020. Single-person households will receive between 150,000 and 525,000 won, single-earner households between 150,000 and 910,000 won, and dual-earner households between 150,000 and 1.05 million won. However, if the amount is less than 150,000 won, it will not be paid at the end of June but will be settled in September.

Only one person per household can apply for the earned income tax credit. To receive the credit, both income and property requirements must be met. For single-person households, this applies if there is no spouse, dependent children, or direct ascendants aged 70 or older. Single-earner households are those with a spouse (total salary, etc. under 3 million won), dependent children, or direct ascendants aged 70 or older, with each having an annual income of 1 million won or less. Dual-earner households are those where both the applicant and spouse each have a total salary, etc. of 3 million won or more. However, if you applied for the first half of 2020 earned income tax credit in September last year, there is no need to apply separately this time.

The income requirement is that the combined total income of the couple in 2019 and combined earned income in 2020 must meet the standard amount according to household classification. Total income includes earned, business, religious income, as well as interest, dividends, pensions, and other income. The standard amounts are: single-person households between 40,000 won and less than 20 million won; single-earner households between 40,000 won and less than 30 million won; dual-earner households between 6 million won and less than 36 million won. The property requirement is that as of June 1, 2019, the total property of all household members?including real estate, jeonse deposits, automobiles, and savings?must be less than 200 million won, and debts are not deducted.

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