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Educational expense tax deductions for adult children’s student loan repayments are available up to a limit of 9 million won per year per college student. However, this deduction only applies to principal and interest repaid directly by the child.
In conclusion, if an adult child takes out a student loan and repays it, the repayment amount may be eligible for an education expense tax deduction, and for college student children, the deduction is possible within the limit of 9 million won per year per person. However, amounts repaid on your behalf by your parents are excluded from the deduction.
The rationale is as follows:
- deductible: Amount repaid directly by the student out of the principal and interest repayment amount of the student loan
- Deduction Requirements: Deduction is possible if the child’s annual income is less than 1 million won and he or she is a college student. There is no age limit.
- Deduction limit: Deductions are made up to a limit of 9 million won per year per college student.
- caution: The principal and interest of student loans repaid by your parents on your behalf are not eligible for education expense tax deductions.
