Expanded Tax Exemptions for Childbirth & Childcare｜Up to ₩200,000 per Child per Month, Plus Education, Healthcare & Tobacco Policy Updates

The Korean government has approved a package of 35 amended laws at a Cabinet meeting, focusing on childbirth and childcare support, youth asset-building, and strengthening medical services. The most notable change is the expansion of tax-free childbirth and childcare allowances to ₩200,000 per child per month, along with broader tax credits for education expenses—measures designed to significantly reduce household financial burdens.

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Key Changes: Expanded Tax-Free Childbirth & Childcare Allowances

Under the revised Income Tax Act, the tax-free limit for childbirth and childcare allowances paid by employers has been increased from a flat ₩200,000 per month to ₩200,000 per child per month.

• 👶 1 child: ₩200,000 per month tax-free
• 👶👶 2 children: ₩400,000 per month tax-free
• 👶👶👶 3 children: ₩600,000 per month tax-free

This policy will apply to income earned on or after January 1, 2026, and is expected to substantially ease the tax burden for dual-income and multi-child households.

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Expanded Education Tax Credits｜Including Arts & Sports Academies

The amendment also expands education tax credits to include arts and sports academy fees (such as taekwondo, music, and art) for children in Grade 2 or below, or under the age of 9.

This change provides tangible tax savings for families facing high private education costs, potentially increasing year-end tax refunds.

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Additional Tax Benefits for Youth & Families

Revisions to the Tax Incentive Limitation Act introduce tax-free interest income for Youth Future Savings Accounts and expand credit card income deduction limits for taxpayers supporting dependents such as children or grandchildren.

• 💳 Employees with annual salaries of ₩70 million or less
• 👨‍👩‍👧‍👦 Additional ₩500,000 deduction per dependent
• 📈 Maximum increase up to ₩1 million

In addition, spouses living at a different registered address from the household head will now qualify for the monthly rent tax credit, helping reduce housing costs for young adults and newlyweds.

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Stricter Regulation of Liquid E-Cigarettes｜Officially Classified as Tobacco

Amendments to the Tobacco Business Act now classify liquid e-cigarettes as tobacco products, expanding the definition to include products made with tobacco leaves or nicotine.

As a result, e-cigarettes will be subject to the same advertising restrictions, online sales bans, and regulatory controls as conventional cigarettes. These rules will take effect in April 2026.

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Introduction of Regional Doctor Programs & Legal Framework for Telemedicine

To address regional shortages of medical professionals, the government will introduce mandatory service-based and contract-based regional doctor programs.

• Service-based regional doctors: Medical school admission → tuition support → 10 years of mandatory regional service
• Contract-based regional doctors: Licensed specialists → 5–10 year regional service contracts

In addition, revisions to the Medical Act establish a legal basis for telemedicine. Teleconsultations will be permitted for patients who have received in-person treatment for the same condition within a defined period, with implementation scheduled for December 2026.

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Summary｜What These Legal Reforms Mean

This package of 35 legislative amendments goes beyond procedural changes, representing a comprehensive strengthening of policies related to childbirth, childcare, youth support, healthcare, and public health.

In particular, the expanded tax exemptions for childcare expenses and enhanced education tax credits directly translate into higher year-end tax refunds and increased real household income. Both employees and self-employed individuals should carefully review these changes to fully benefit from the updated tax system.