'Year-End Tax Settlement Simplification Service' Launches on the 15th of Next Month... 500,000 Won Tax Credit for Marriage Registration This Year

The simplified service for year-end tax settlement, known as the '13th month salary,' will open on January 15 next year.

The National Tax Service (NTS) announced on the 18th that from January 15 next year, employees can easily complete their year-end tax settlement by using income and tax deduction proof documents provided through the Hometax 'Simplified Service.'

Companies using the batch provision service for simplified data must register their employee list by January 10, and if employees consent to data provision by the 15th of the same month, the NTS will directly provide deduction data to the company on the date requested by the company, either the 17th or 20th.

Companies without their own year-end tax settlement program can register basic data such as employees' total salary from January 3 via Hometax's 'Convenient Year-end Tax Settlement.' Employees can prepare and submit their deduction reports starting January 18 to complete the year-end tax settlement. Companies must withhold and settle the 2024 earned income tax by the time of salary payment in February next year and submit the withholding tax report and payment statement by March 10.

From this year-end tax settlement onward, there will be increased tax support for employees' marriage and child-rearing. First, a tax credit of 500,000 KRW can be received upon marriage registration in 2024. The tax credit is available only once in a lifetime regardless of first marriage or remarriage and is temporarily applicable to marriages registered by December 31, 2026.

Regarding childbirth of the employee or spouse, childbirth support payments received within two years of the child's birth date under common regulations are fully tax-exempt up to two times. Additionally, if there are two or more children aged between 8 and 20, the deduction amount increases by 50,000 KRW compared to before. Medical expenses for children aged six or younger are fully deductible. Employees with total salary exceeding 70 million KRW can also claim deductions for postpartum care center fees (up to 2 million KRW).

The limit for housing-related income deductions is raised, and the standard market price requirement is relaxed. Long-term housing mortgage loans can receive income deductions up to 20 million KRW depending on the repayment period and whether the interest rate is fixed and non-grace period. For houses acquired after January 1 this year, the housing standard is raised from a standard market price of 500 million KRW to 600 million KRW. Monthly rent payments are eligible for tax credits for employees with total salary up to 80 million KRW (comprehensive income amount up to 70 million KRW), with 15% of the annual rent amount up to 10 million KRW deductible (17% for those with total salary 55 million KRW or less). The limit for housing subscription savings deduction is increased from 2.4 million KRW to 3 million KRW annually.

Benefits for donations and credit card use are also increased. For donations made in 2024, a higher deduction rate of 40% (instead of 30%) applies to amounts exceeding 30 million KRW among special, general, and employee stock ownership association donations. If the amount spent using credit/debit cards and cash receipts in 2024 exceeds that of 2023 by more than 5%, an additional 10% income deduction (up to 1 million KRW) is applied to the increased spending amount.

The NTS will fully revamp the simplified service to prevent employees from mistakenly or intentionally receiving incorrect deductions during the year-end tax settlement process. In the first half of 2024, the list of dependents with income exceeding 1 million KRW (or total salary 5 million KRW if only earned income) will be provided, and simplified data for dependents exceeding the income criteria or who died before December 31, 2023, will not be provided. However, dependents exceeding the income limit can still view their own simplified data.

An NTS official stated, "The NTS will establish a sound tax culture through precise year-end tax settlement inspections to ensure tax fairness with diligent reporting employees. For cases difficult to prevent through the system, such as false donation receipt deductions and excessive housing fund deductions, we will conduct thorough post-inspections using big data analysis of internal and external data such as donation statements and household housing ownership status to verify the appropriateness of deductions."