South Korea to swap marriage tax credit for direct cash grant

The South Korean government plans to replace the existing marriage tax credit, which provides a one‑time deduction of up to 1 million won per couple, with a direct cash subsidy. The change is intended to reach low‑income households that cannot benefit from a tax deduction and to simplify the timing of the benefit. According to the Ministry of Economy and Finance, about one‑third of the 20.85 million married taxpayers in 2023 were non‑taxpayers, leaving them unable to claim the credit.

The reform is part of a broader tax‑spending overhaul that will also review other family‑related deductions, although child tax credits are not slated for conversion. The government expects the cash grant to be a faster, more inclusive form of support for newlyweds while maintaining other tax incentives for small businesses, youth employment and strategic industries.