Last Year's Earned Income and Child Tax Credits 5.1 Trillion Won... 85% Increase in Recipients Over 3 Years

[Sejong=Asia Economy Reporter Kim Hyunjung] The amount of Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) payments and the number of households receiving them have significantly increased over the past three years.

According to the National Tax Service on the 5th, the 2020 income year EITC and CTC payments were made to 5.05 million households totaling 5.1342 trillion KRW. When first introduced in 2008 for the income year, the EITC (CTC was not yet introduced) was paid to 590,000 households amounting to 453.7 billion KRW. Over 12 years, the payment amount increased 11.4 times and the number of recipient households expanded 8.5 times.

In particular, the increase in payment amounts and households over the past three years has been remarkable. For the 2017 income year, EITC and CTC payments were made to 2.73 million households totaling 1.8298 trillion KRW. Compared to the 2017 income year, last year's EITC and CTC payments increased by 180.6% (3.0344 trillion KRW) in amount and 85.0% (2.32 million households) in the number of recipient households.

The significant increase in the scale of EITC and CTC payments over the past three years is due to the reform of the Earned Income Tax Credit system in the 2018 tax law revision. Starting from the 2018 income year, the government abolished the age restriction of 30 years or older for single households and relaxed the income and asset criteria for the EITC. The maximum payment amounts for both EITC and CTC were also raised.

The EITC increased from 1.3381 trillion KRW and 1.79 million households in the 2017 income year to 4.5199 trillion KRW and 4.33 million households in the 2020 income year, representing a 237.8% (3.1818 trillion KRW) increase in amount and a 141.9% (2.54 million households) increase in recipients.

The CTC increased by 24.9% (122.6 billion KRW) from 491.7 billion KRW and 940,000 households in the 2017 income year to 614.3 billion KRW and 720,000 households in the 2020 income year; however, the number of households decreased by 23.4% (220,000 households) due to declining birth rates.

Meanwhile, if this year's tax law revision, which further relaxes the income criteria for EITC by 2 million KRW per household, is passed by the National Assembly, the amount and number of households receiving EITC are expected to increase further in the future.

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