The earned income tax credit (EITC) and child tax credit have become representative income support policies that bolster the real income of low-income households and ease the burden of child-rearing. The payment scale, which stood at 453.7 billion won when the system was introduced in 2009, has swelled to 5.2 trillion won by 2026. In particular, the abolition of the age limit for single-person households in 2019 expanded eligibility for young people, and among recipients of the 2025 tax year credits, people in their 20s accounted for the largest share.

Payment Scale Grown 11.5 Times Since Introduction

The earned income and child tax credits were introduced to support the livelihoods of households that are economically active but do not earn sufficient income, and to ease the financial burden of raising children. Since the system's launch, the National Tax Service has steadily expanded the eligible population and payment criteria while carrying out various promotional activities.

The 2026 payment scale, excluding late applications, reaches 5.2 trillion won. Compared with the 453.7 billion won paid in the system's early years, this is roughly 11.5 times larger. The significance lies in the fact that the credits have grown into a major policy tool that eases the household burden on low-income families and performs an income redistribution function.

2019 Abolition of Age Limit Expanded Support for Young People

The credits' support function for younger generations is also noteworthy. In the past, single-person households could apply for the earned income credit only from age 30 or older, but this criterion was abolished in 2019, allowing single-person households of any age to receive support as long as they meet statutory requirements such as income and asset conditions.

Following this change, the foundation for young people to receive the credits broadened. The fact that people in their 20s made up the largest share of recipients of the 2025 tax year earned income and child tax credits shows that the credits also play a role in underpinning the livelihoods of younger generations.

Eligibility and Payment Criteria for the Earned Income Tax Credit

The earned income tax credit is a system that supports households with earned or business income but low income levels. It is not paid simply because income is low; households must meet income criteria by household type as well as asset requirements.

• Annual total income criteria: under 22 million won for single-person households, under 32 million won for single-earner households, under 44 million won for dual-earner households
• Maximum payment: 1.65 million won for single-person households, 2.85 million won for single-earner households, 3.3 million won for dual-earner households
• Asset requirement: total assets of all household members under 240 million won (if assets are 170 million won or more but under 240 million won, only 50% of the calculated credit is paid)

Actual payment amounts vary depending on income, assets, and household composition.

Child Tax Credit: Up to 1 Million Won per Child

The child tax credit is designed to ease the child-rearing burden on low-income households. Households with a combined annual total income of under 70 million won can apply if they meet related conditions such as having dependent children, and up to 1 million won per child may be paid.

While the two programs share the common goal of easing living and child-rearing costs, their policy roles differ. The earned income credit focuses on supporting income generation through economic activity, whereas the child tax credit focuses on relieving the financial burden of households raising children.

Payment Structure Designed to Preserve Work Incentives

A key feature of the earned income credit is its payment structure, which takes work motivation into account. Within certain income ranges, the credit increases as income rises, and after passing a certain range, the payment amount gradually decreases. This approach pursues two policy goals at once—supporting low-income households and maintaining work incentives—with the aim of ensuring that income earned through economic activity translates into household livelihood stability.

However, the earned income and child tax credits do not solve all the economic difficulties of low-income households. Stable jobs, adequate wages, and housing and living costs remain challenges that must be addressed separately. To enhance the effectiveness of the system, it is necessary to examine not only the scale of support but also recipients' actual living conditions and accessibility of the system.

As the earned income and child tax credits—which supplement the income of working low-income households and ease child-rearing burdens—have expanded greatly in payment scale since their introduction, it is becoming increasingly important to guide households in need so that they can accurately understand eligibility requirements and procedures and make use of the system.

[This article was written based on information provided by the National Tax Service on the earned income and child tax credit systems and a related contest announcement. The 2026 payment scale of 5.2 trillion won excludes late applications, and actual credit eligibility and payment amounts may vary depending on the income attribution year, household composition, and income and asset requirements. AI assistance was partially used.]