Understanding the Importance of Address in Tax Credit Eligibility
The composition of a household as per the resident registration on June 1, 2024, is crucial for evaluating eligibility for Earned Income Tax Credit (EITC) and Child Tax Credit (CTC). This household composition influences both asset and income assessments. If, for instance, you are married and living separately but are still registered under your parents’ address, your parents’ assets and income could be considered in your credit evaluation.
Criteria for Recognizing a Different Actual Residence
The National Tax Service (NTS) acknowledges that the registered address might not always reflect the actual living situation. They offer provisions to recognize an “actual residence,” which refers to where you and your family genuinely live and share daily life, even if it differs from the registered address.
- If your registered address is your parents’ home but you live separately with your spouse and children.
- If you maintained your registered address during military service but have lived with your family post-discharge.
- If you and your spouse maintain separate addresses but live together with your children.
How to Submit Evidence for Household Separation
To be recognized as an independent household, mere claims of separate living are insufficient. You need to provide objective evidence such as:
- Utility bills, communication charges, or credit card statements sent to your actual residence.
- Rental agreements in your or your spouse’s name.
- Family photos taken at the residence, medical records, parcel delivery records, or education-related documents for children.
- Verification from childcare facilities or health insurance records.
Once you gather these documents, submit a ‘Request for Verification of Household Separation’ via the NTS’s Hometax platform or visit your local tax office. Successful verification will exclude your parents’ assets and income from your credit evaluation.
Eligibility for Child Tax Credit
To qualify for CTC, you must have children under 18 by December 31, 2023, and meet specific income and asset criteria. If you are proven to live with your spouse and children, and the household separation is acknowledged, you may apply for CTC, provided your combined income and total assets do not exceed certain thresholds.
Action Steps for Newlyweds, Veterans, and New Parents
The period from May to June is when many apply for EITC and CTC. New couples or discharged veterans often face issues due to unupdated addresses, risking credit rejection. However, the NTS allows for verification based on actual residence, so do not hesitate to file an appeal if necessary.
Utilizing Hometax and Local Tax Offices
You can submit a household separation request through Hometax by uploading necessary documents or visit a tax office for consultation and submission. For precise guidance, contact the NTS’s dedicated credit center at 1566-3636.