[Getty Images Bank]
[Getty Images Bank]

The government is pushing to replace its marriage tax credit — currently offered as a tax reduction to encourage newlyweds — with a direct cash subsidy.

According to officials at relevant ministries, the Ministry of Economy and Finance is reviewing a plan to convert the marriage tax credit into a direct fiscal subsidy paid to married couples.

Under the current system, couples who register their marriage are eligible for a one-time lifetime tax credit of 500,000 won ($340) per person, up to a combined 1 million won.

The tax credit structure has a built-in limitation: those with little or no taxable income cannot benefit from it. Recipients must also wait until the year-end tax settlement to receive the benefit.

To provide broader and faster support, the Ministry of Economy and Finance is reviewing a plan to pay the subsidy directly to newlyweds.

According to the National Tax Service, of the roughly 20.85 million wage earners who filed income tax returns in 2023 — before the marriage tax credit was introduced — about 6.89 million, or 33 percent of the total, were non-taxpayers who paid no income tax.

Because they fell outside the scope of the tax credit, these individuals were in effect shut out of what has been called the "national wedding gift." Even those who do pay taxes faced the inconvenience of waiting until the year-end settlement to receive the benefit.

The child tax credit, however, is not included in the current round of reforms and will not be converted to a direct fiscal payment.


yeonjoo7@heraldcorp.com