Regular Earned Income and Child Tax Credits for Last Year to Be Paid Tomorrow... 2.9 Trillion Won Scale

[Asia Economy Sejong=Reporter Kim Hyewon] The National Tax Service (NTS) will advance the payment of the regular earned income and child tax credits for the previous year by more than a month ahead of the legal deadline to support low-income households.

The NTS announced on the 25th that it will pay a total of 2.8604 trillion KRW to 2.91 million households for the regular earned income and child tax credits for the previous year on the 26th.

Earned income and child tax credits are paid three times per tax year: for the first half, second half, and regular payments. The half-year payments, made twice a year, are only available to wage earners, while the regular payment, calculated and paid once for the entire tax year, is available to wage earners, business income earners, and religious income earners. Those wage earners who received the half-year credits are not eligible for the regular credit.

For the 2021 tax year credits, the first half payment was applied for in September 2021 and paid in December, and the second half payment was applied for in March 2022 and paid in June. The current payment is for the regular credit, which was applied for in May. The regular payment’s legal deadline is the end of September, but the NTS advanced the payment by more than a month to support low-income households struggling due to the COVID-19 pandemic and rising prices.

The NTS reviewed the eligibility of applicants for the regular credit and sent decision notices via mobile and mail. If applicants had pre-registered their bank accounts, the credits will be deposited into those accounts on the 26th. If no account was registered, recipients can visit a post office with their tax refund notice and ID to receive cash.

Including the half-year credits paid in December last year (first half) and June this year (second half), totaling 2.0256 trillion KRW, the total earned income and child tax credits paid for the previous year amount to 4.886 trillion KRW for 4.89 million households. This is slightly less than the 4.9845 trillion KRW paid to 4.87 million households for the 2020 tax year.

The average credit amount per household for the previous year was 1.1 million KRW. The earned income credit averaged 1.02 million KRW, and the child tax credit averaged 860,000 KRW. Among recipient households, single-person households accounted for the largest share at 66.1% (2.94 million households), followed by single-income households at 28.3% (1.26 million households), and dual-income households at 5.6% (250,000 households). In terms of amounts, single-person households received the largest share at 51.1% (2.4954 trillion KRW), single-income households 40.7% (1.989 trillion KRW), and dual-income households 8.2% (401.6 billion KRW).

By income type, wage income households accounted for 59.6% (2.65 million households), exceeding business income households at 40.2% (1.79 million households). By age, those aged 60 and over were the largest group at 28.3% (1.26 million households), followed closely by those aged 20 and under at 28.1% (1.25 million households).

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