'Earned Income and Child Tax Credits' Maximum Amount Paid to Record High Number of Households... Average 1.09 Million Won per Household

5.6 Trillion KRW to 5.07 Million Households for 2023 Earned Income and Child Tax Credits
Average Payment: Earned Income Tax Credit 1.11 Million KRW, Child Tax Credit 1.02 Million KRW

With the relaxation of income criteria for the Child Tax Credit, the number of beneficiaries and the amount paid for the 2023 earned income and child tax credits have reached record highs.

On the 23rd, the National Tax Service announced that it has paid 5.6 trillion KRW to 5.07 million households for the 2023 earned income and child tax credits so far.

The average payment per household is 1.11 million KRW for the earned income credit and 1.02 million KRW for the child tax credit, with an overall average of 1.09 million KRW. Since the first payment in 2009 through the payments made up to August 2024, a total of 44 million households have benefited from the earned income and child tax credits, with a cumulative payment of 41.4 trillion KRW.

Due to low marriage and birth rates, the number of child tax credit recipients has decreased every year. In 2015 (for income earned in 2014), when the child tax credit was first introduced, 1.07 million households received it, but by 2023 (for income earned in 2022), this number had dropped by 51.4 percentage points to 520,000 households.

However, this year (for income earned in 2023), the income threshold was relaxed for the first time in 10 years from under 40 million KRW to under 70 million KRW, resulting in payments of 972 billion KRW to 950,000 households, nearly doubling the number of recipients compared to the previous year.

Regarding the age distribution of earned income credit recipients, young adults and seniors?those under 20 (28.7%) and those 60 and older (32.2%)?account for 61% of the total. Those in their 30s to 50s make up 12-15%. Among recipient households, the proportion of elderly recipients aged 60 and above has increased annually by 1-2%, from 24.2% in 2018 (for income earned in 2018) to 32.2% in 2023 (excluding late applications).

For the child tax credit, the age distribution shows that middle-aged groups with dependent children?those under 30 (28.5%), under 40 (47.6%), and under 50 (17.9%)?make up 94% of recipients. Those under 20 and those 60 and older account for 3.5% and 2.5%, respectively.

By household type, the earned income credit was paid to 2.87 million single-person households (70%), 1.05 million single-earner households (25.6%), and 180,000 dual-earner households (4.4%), similar to last year. However, due to the relaxation of income criteria for the child tax credit, single-earner households increased by 1.5 times to 640,000 households (67.3%), and dual-earner households increased by 3.8 times to 310,000 households (32.7%) compared to last year.

The National Tax Service plans to pay the 2023 earned income and child tax credits applied for after the deadline, from September to November, before the Lunar New Year holiday in January 2025.