"Basic Deduction Income Requirement Raised from 1 Million to 4 Million Won"... Jung Taeho of the Democratic Party Proposes Amendment to Income Tax Act

If Only Earned Income... Total Salary Threshold to Rise from 5 Million Won to 9 Million Won
Jung: "Basic Deduction Criteria Should Reflect Wage and Price Levels"

A bill to raise the basic deduction income requirement for spouses and dependents from the current 1 million won to 4 million won has been introduced in the National Assembly. The bill also expands the total salary threshold for basic deduction eligibility in cases of employment income only, from 5 million won to 9 million won.

Jung Taeho, Member of the Democratic Party of Korea. Office of Representative Jung.

Jung Taeho, a member of the Democratic Party of Korea, announced on September 28 that he sponsored a partial amendment to the Income Tax Act reflecting these changes on September 23.

Under the current law, if the aggregate annual income of a spouse or dependent is 1 million won or less, a basic deduction of 1.5 million won per person can be claimed. When the dependent has only employment income, the threshold is a total salary of 5 million won or less.

The proposed amendment raises these requirements to 4 million won or less in aggregate income and 9 million won or less in total salary for those with only employment income. The intent is to reduce cases where spouses, children, or elderly parents are excluded from the basic deduction simply because they have a small amount of income.

The current threshold of 1 million won in aggregate income has remained unchanged for about 30 years since 1996. The 5 million won salary threshold for employment income only has also not been adjusted since it was introduced 10 years ago in 2016.

Jung explained that as wages and prices have risen and small-scale income activities such as part-time jobs and short-term employment have become more common, it is necessary to adjust basic deduction standards to reflect today’s realities.

Jung stated, "While the income threshold for basic deductions has gone unchanged for a long time, wages and prices have continuously increased, and small-scale economic activities such as short-term work and part-time jobs have become more prevalent. We will update the criteria so that spouses and dependents are not excluded from the basic deduction simply because they earn a small amount of income."

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