Applications for the 2026 half-year Earned Income Tax Credit (first-half portion) opened on September 1. The application period runs from September 1 to September 15.

The Earned Income Tax Credit is a system in which the state directly provides cash support to households that are working but whose income is not sufficient. It differs in nature from year-end settlement refunds, where extra taxes are paid and then returned. If only the requirements are met, money is deposited into the recipient's bank account, and the purpose of the system is to preserve real income for low-income households while maintaining work incentives. Analyses that the tangible effect is greater for households in the early stages of income-earning activities or with unstable employment forms also align with this purpose.

■ Who applies for the half-year application and when

The half-year application is available to households with earned income only. If a household also has business income, it is not eligible for the half-year application and is automatically converted to a regular application. The income used as the application basis is earned income from the first half of 2026 (January to June).

Payment is made in installments. Of the annual calculated amount, 35% of the first-half portion is paid first in December, and the remainder is paid together with the second-half portion at the regular settlement in June 2027. Households that have already filed a half-year application will have the next half-year application processed automatically without separate procedures. The half-year application system was introduced to reduce the time gap between when income is earned and when benefits are actually received.

■ Last year's regular payment: 2.8741 trillion won to 2.7 million households

The actual beneficiary structure of the system is revealed in the 2025 regular payment status of the Earned Income and Child Tax Credits released by the National Tax Service on September 1. The regular payment covered 2.7 million households, with a total payment of 2.8741 trillion won and an average of 1.06 million won per household. Of this, the Earned Income Tax Credit was paid to 2.04 million households totaling 2.2551 trillion won, and the Child Tax Credit was paid to 660,000 households totaling 619 billion won.

By age group, households in their 20s were the largest group among Earned Income Tax Credit recipients at 590,000 households. This is interpreted as reflecting the fact that many people in the early stages of entering society, with low income or in unstable employment forms such as part-time or contract work, meet the income criteria. For the Child Tax Credit, households in their 40s (310,000 households, 47.0%) and 30s (180,000 households, 27.3%) accounted for 74.3% of the total, confirming that payments are concentrated in households raising children.

■ Recipient households down 160,000 in one year... "Due to rising wages and assets"

Including half-year payments, the total recipient households for 2025 were counted at 4.74 million, with payments totaling 5.2335 trillion won. Compared to 2024 (4.9 million households, 5.4197 trillion won), this represents a decrease of 160,000 households and 186.2 billion won, respectively. The National Tax Service attributed the decline to an increase in households exceeding income and asset thresholds due to rising nominal wages and property values. This means that even without changes to the system itself, more households were pushed beyond the eligibility line as wages and asset prices rose.

This trend may be partially adjusted in the 2026 tax law revision bill. The government proposal includes easing income requirements to reflect minimum wage increases and raising the maximum payment to 3.6 million won to reflect inflation. However, as the bill is still at the revision stage, the extent of the easing and increase may change during National Assembly deliberations.

■ Missing the deadline reduces payment to 95%... Checking with the call center in advance is safer

Households that miss the regular application deadline can apply later through Hometax or the automated response system (ARS), but in this case the payment is reduced to 95% of the calculated amount. If it is unclear whether income and asset requirements are met, including for half-year applications, it is safer to check in advance through the National Tax Service's tax credit call center.

[Eligibility, amounts, and application criteria for policies and support programs may change according to relevant laws and government policy changes. Actual applications and eligibility should be confirmed through official guidance such as the National Tax Service's Hometax. This article was partially assisted by AI.]