In the National Tax Service's "year-end tax settlement simplification service," which begins on Jan. 15, the list of dependents exceeding the income criteria will be provided. This is a measure to prevent errors in year-end tax settlement deductions that occur when dependents not eligible for deductions are listed.
The National Tax Service announced on the 18th that the 2024 year-end tax settlement simplification service will be open starting Jan. 15. Using the income and tax credit documentation provided by the Home Tax simplification service, the year-end tax settlement can be done more conveniently. This year, up to 41 types of data, including costs for purchasing equipment for the elderly and the disabled, will be provided through the simplification service.
Companies using the "batch provision service" for simplified data must register the list of employees by Jan. 10. If employees agree to provide data by Jan. 15, the National Tax Service will directly provide the deduction data to the company on Jan. 17 or 20, depending on the date requested by the company.
Companies that do not have their own year-end tax settlement program can register basic data such as employees' total earnings in the Home Tax "convenient year-end tax settlement" starting Jan. 3. Companies must settle and withhold the earned income tax for the year 2024 and submit withholding tax reports and payment statements by Mar. 10 when providing salaries by Feb. 2025.
From this year, the National Tax Service will overhaul the year-end tax settlement simplification service to prevent employees from making mistakes or intentionally receiving improper deductions.
First, a list of dependents with income exceeding 1 million won (or total earnings of 5 million won for earned income only) in the first half of 2024 will be provided. Simplified data will not be provided for dependents who exceed the income limit or died before Dec. 31, 2023. Dependents exceeding the income limit must directly check their own simplified data.
If the income criteria are exceeded and the individual is not eligible for basic deductions, expenses such as insurance premiums or donations made by dependents cannot be deducted. The National Tax Service emphasized that one should carefully examine whether one qualifies for basic deductions during the year-end tax settlement.
Additionally, the list of individuals with excess income is determined based on first-half income only, so the absence from the list does not mean deductions can be claimed as dependents. A National Tax Service official noted, "You must verify total annual income, including income incurred in the second half, to determine deduction eligibility."
The official stated, "The National Tax Service aims to establish a sound tax culture by ensuring tax fairness with diligent filers through meticulous year-end tax settlement checks. Deductions that are difficult to prevent by the system, such as false donation receipts and excessive housing cost deductions, will be thoroughly reviewed through big data analysis of internal and external data, such as donation details and household dwelling ownership status, to ensure deductions are appropriate."