Child Tax Credit Increased by 100,000 Won per Child
Credit Card Deductions Now Apply to Swimming Pool and Fitness Center Fees
Hometown Love Donation Deduction Rate Doubled for Disaster Areas
The simplified service for the 2025 year-end tax settlement will open on January 15 next year. Starting with this year-end settlement, the child tax credit amount will increase by 100,000 won per child, and credit card deductions will now apply to swimming pool and fitness center fees. In addition, if donations are made to disaster-affected areas through the Hometown Love Donation program, the deduction rate will be doubled.
The National Tax Service announced on the 17th that the 'Simplified Service' on Hometax will be launched on January 15 next year. Through the simplified service, taxpayers can check 45 types of income and tax deduction documents required for deductions and exemptions, such as educational expenses.
With this year-end settlement, the tax burden for employees raising children will be reduced. The child tax credit for children aged 8 to 20, based on the number of eligible dependents, will be increased by 100,000 won per child compared to last year. The credit will be 250,000 won for one child, 550,000 won for two children, 950,000 won for three children, and 1,350,000 won for four children.
Male employees who resigned for childcare reasons and were rehired by a small or medium-sized enterprise after March 14 this year can receive a 70% reduction in income tax for three years from the date of employment. In addition, if a child receiving developmental rehabilitation services is under the age of nine, the additional disability deduction (2 million won) can be claimed with only a certificate of use for developmental rehabilitation services, without the need to visit a hospital for a disability certificate.
If the spouse of a head of a household without a home is an employee earning 70 million won or less, 40% of the amount paid into a housing savings account, such as a comprehensive housing subscription savings account (up to 3 million won per year), can be deducted from income. Also, swimming pool and fitness center fees paid after July 1 this year can be additionally deducted as cultural and sports expenses (at a 30% deduction rate) when using a credit card.
The deduction rate for Hometown Love Donations made to disaster areas will be doubled, and the donation limit will also be increased. For donations to special disaster areas, any amount exceeding 100,000 won will be eligible for a 30% tax deduction rate, which is twice as high as that for general areas. However, donations must be made within three months from the date the area is declared a special disaster area. The donation limit for Hometown Love Donations will be raised from 5 million won to 20 million won.
Companies using the bulk provision service for simplified data can register the list of employees to receive the data on Hometax by January 10 next year. Then, on the selected date by January 15, they can download the simplified data for employees who have given consent all at once.
Companies wishing to process year-end tax settlements quickly using the data provided at the opening of the simplified service can download the data on January 17. Those who want to file using the final data reflecting additional submissions can download and use the data on January 20.
Companies without their own year-end settlement program can register basic year-end settlement data, such as total salary per employee, through the 'Convenient Year-End Settlement' service provided by the National Tax Service. Employees can fill out and submit their deduction reports to their companies starting January 18 next year.
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