introduction Essential survival strategies in an era of high prices Climate companion cards meet Setech
as the Korean economy moves beyond 2024 and into 2025, high prices and saving money are the hot topics. the Seoul Metropolitan Government's Gifu Companion Card has become more than just a transportation card, it has become a key item to support household finances, as even the subway and bus fares that serve as Seoulites' feet every morning and after work have become unaffordable. The unlimited use of public transportation in Seoul for the unbeatable price of 60,000 won per month has revolutionized transportation costs. but the true value of the card goes beyond just reducing monthly transportation costs: it also provides a powerful tax deduction in the year-end settlement known as the 13th paycheck.
many office workers are using the card, but don't realize that it can act as a tax-saving boon, or they're missing out because of the complicated registration process. Especially if you're using cash to top up your card, you'll lose hundreds of thousands of won in transportation expenses if you don't register with the IRS.in this report, we analyze everything from how to register to get a 100% tax deduction for recharging your Climate Alliance Card, to the economic implications of the public transportation deduction in 2025, and how to manage it smartly using fintech apps like TOS. more than just information, we'll give you solid strategies to protect your wallet and get your taxes back.
chapter 1 Understanding the economics and principles of the transit deduction
1.1 The basic mechanics of the credit card deduction
often referred to as the cherry on top of year-end taxes, the credit card and other expenses deduction is a system that allows workers to take a percentage of their earned income off the top of their expenses during the year. The key to this system is that the deduction kicks in for expenses that exceed 25% of your gross pay. for example , if you earn 40 million won a year, you can start deducting money spent over 10 million won (25%). it's important to note that the deduction rate varies depending on what you paid with.
in general, credit cards, which are the ones we use the most, have a deduction rate of only 15%. debit cards and cash receipts have a 30% deduction, which is double that. but what about public transportation? the government offers a much higher deduction rate for public transportation to reduce the burden of transportation costs and encourage the use of environmentally friendly public transportation.
1.2 Changes in the public transportation deduction rate from 40% to 80%
the deductibility rate for public transportation has been in a state of flux depending on the policy. While it has basically remained at a high rate of 40%, it has been temporarily increased to 80% during times of high oil prices and economic crisis. that 's more than five times the credit card deduction rate (15%), meaning that for the same $100 spent, it's overwhelmingly more beneficial to take public transit than to shop with a credit card to increase your tax refund.
this trend is expected to continue in the 2024 imputed tax year (January 2025), especially since policy-type transportation cards such as the Climate Pass are actively encouraged by governments and local governments, so the tax benefits are likely to be maintained or enhanced rather than reduced. This makes using the Climate Pass a great financial tool for both saving money on transportation and getting a tax refund.
1.3 The integration of the tax credit limit and the role of the Climate Alliance Card
in the past, separate additional deduction limits of 1 million won each were granted for public transportation, traditional markets, and book/performance expenses. However, due to recent tax law amendments, these limits have been consolidated.for workers with a gross salary of KRW 70 million or less, the basic deduction limit (KRW 3 million) is replaced with a unified limit that includes public transportation, increasing the maximum amount that can be deducted.
the Climate Accompanion Card costs about 62,000 to 65,000 won per month to recharge and use. this translates to about KRW 750,000 to KRW 800,000 per year.if all of this amount is recognized as public transportation expenses and is subject to a high deduction rate (40-80%), it will make a significant contribution to lowering the taxable base. Especially for those who are new to society or thrifty people who have difficulty meeting the deduction limit through credit card expenses alone, the Climate Companion Card will be a filial item that fills the deduction limit.
chapter 2 Strategies for claiming tax deductions depending on how you recharge the Climate Alliance Card
in order to claim the tax benefit of the Climate Alliance Card, you need to know exactly how you are recharging your card. this is because the way the IRS is notified is completely different depending on how you charge your card.
2.1 Charging with credit and debit cards
for Android smartphone users who use the Mobile T-Money app, most people reload their Climate Alliance Card by registering a credit or debit card within the app. in this case, the recharge amount is automatically included in the card usage history because it systematically uses the payment network of the card company. Therefore, it is highly likely that the year-end settlement simplification service will track the recharge amount as a credit card without any complicated registration process. However, it is safest to apply for the tax deduction service within the Mobile T-Money app to prevent the recharge amount from being taken as a general debit card deduction instead of a special deduction for public transportation expenses.
2.2 Risks of using cash and bank transfers
the problem is iPhone users with physical cards, the digitally challenged, or those who prefer to manage cash, who often top up their cards with cash at unattended chargers in convenience stores or subway stations. the fatal problem with this is that the IRS has no way of knowing whose money this cash is and what it was used for.
in order to claim a tax deduction for the amount you loaded with cash, you must request a cash receipt. it's the same way we eat at a restaurant and say "cash receipt please" and enter a number. but entering the number every time you recharge every month is cumbersome and easy to forget. luckily, the Climate Accompanion Card has a system where you only need to register once and it will automatically give you a cash receipt for every subsequent top-up. if you miss this registration process, you could end up spending KRW 70-80k over the course of a year, only to have it evaporate in your year-end settlement.
2.3 Processing refunds
some people may decide to refund the Climate Accompanion Card midway through the program. since the tax deduction is basically applied to the actual expenses, the refunded amount is naturally not deductible. the IRS system only calculates your deduction based on the amount you ultimately spend.
chapter 3 A must-follow practical guide to registering cash receipts
now, let's take a step-by-step look at the actual registration process for claiming the deduction. You only need to do this once, so we recommend that you follow along now.
3.1 A complete breakdown of how to register for the IRS home tax credit
the most obvious and official way to enroll is through the IRS HomeTax website or the mobile HandTax app.
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log in and connect Access the National Tax Service HomeTax (hometax.go.kr) on your PC or launch the SonTax app on your smartphone. log in with a joint certificate, financial certificate, or simple authentication (KakaoTalk, TOS, etc.).
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navigate the menu Click E-Tax Statement Cash Receipt Credit Card from the menu at the top of the main screen. in the mobile app, you can find it by tapping the full menu icon (≡).
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select the Cash receiptsfor consumers submenu, select the Cash receipts (worker consumer) tab, and then click Consumer-issued instruments only cards.
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enter cell phone number and card management Enter the cell phone number and card management menu for issuing cash receipts . this is where you will register the Climate Companion Card as a cash receipt card in your name.
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at the bottom of thecard number entry screen , there is a field called Direct entry. enter your 16-digit card number exactly as it appears on the back of your physical Climate Partner Card. in the Card alias field, write Climate Companion Card to make it easier to manage later.
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click the Register button Click the Register button to complete the process. From the day after you register, you can see if you have recharged your Climate Companion Card in the View Cash Receipt Usage History menu.
3.2 Easy registration via mobile T-money app
if you have an Android phone and have been issued a Climate Companion Card with Mobile T-Money, you can register more easily within the app.
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launch the app and select the menu Open the Mobile T-Money app and tap the menu icon in the top left corner.
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select Climate Passport and find Climate Passport in the menu list.
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tap the Register for TaxCredit or Request Cash Receipt button located in the center or bottom of the screen .
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enter yourinformation Enter your name, social security number, and other identifying information, and the Tmoney system will connect with the National Tax Service to automatically complete your tax credit application.
chapter 4 Smart cash receipt management with the Toss app
recently, more and more users are using the fintech app Toss to manage their cash receipts. we'll clarify what the Toss app does and how to set it up when it comes to reloading your Climate Alliance card.
4.1 How does the Toss app work with the Climate Alliance Card?
the first thing to clarify is that the Toss app itself does not directly register the number of the physical Climate Alliance Card and hand it over to the tax authorities. The registration of the physical card must be done at home, as described above.
so when do you need a toss? when you want to top up with direct deposit, or when you want to use your phone number to get a cash receipt when you top up with cash. the My Cash Receipts menu in the Toss app allows you to manage your cash receipt method (cell phone number) registered with the IRS and easily view the history of your cash receipts.
4.2 Registering and viewing your cash receipt number in the TOS app
if you top up your Climate Companion Card with cash at a convenience store and the card is not registered, you will need to ask the cashier for a cash receipt and enter your mobile phone number. You can check in the TOSS app if the number you enter is properly registered with the National Tax Agency.
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enter the full menu Launch the Toss app and tap the full tab in the bottom right corner.
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go to the settings menu Click the gear settings icon in the top right corner of the screen .
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findTOSPACE in the list of settings menu options and enter TOSPACE.
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manage cash receipt information Click the menu called Cash receipt information. make sure your current cell phone number is entered here. if it has changed or is not registered, click the Edit button to change it.
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how automatic issuance works Once you've registered your number here , you'll be able to see all your future payments with TOSPAY, as well as any cash receipts issued to this number offline, at a glance in the TOSS app. This means that you can use TOSS as a monitoring tool to ensure that cash receipts are processed properly after reloading your Climate Alliance Card.
chapter 5 Frequently asked questions and caveats for Climate Passport users
we address the most common issues and questions users have during the tax credit registration process.
Q1 I've been using my card since January, but I registered in May. Will my January-April usage be deducted?
this is the most frustrating question, but the answer is no. in principle, cash receipts and tax deductions are only available from the date of registration. the IRS system does not retroactively recognize bearer transactions prior to registration, so registering your card with HomeHouse as soon as you purchase it, or as soon as you read this, is the only way to avoid losing money.
Q2 I charged a card with a tariff, will the tariff fee be deducted?
yes, you can. the Gifu Companion Card is divided into two types: a 65,000 won ticket that includes a ride and a 62,000 won ticket that does not. When you top up at a convenience store or station, you will receive a cash receipt for the total amount you paid (e.g. 65,000 won). Therefore, the entire amount including the ride is tax deductible. however, how it is classified as a special deduction for public transportation (40-80%) and a general cash receipt deduction (30%) is subject to the detailed guidelines of the National Tax Service, but basically, there is no problem in receiving the tax deduction.
Q3 Do I need to apply separately to register and use Samsung Pay?
registering and using the Climate Alliance Card with Samsung Pay means that it is based on Mobile T-Money. In this case, if the tax deduction is registered within the Mobile T-Money app, you do not need to do anything else. However, sometimes the settings are lost during the app update or reinstallation process, so it is recommended to go into the T-Money app and check whether the tax deduction is registered or not.
Q4 I'm an iPhone user and use a physical card, do I need to take a receipt every time?
no. If you've completed the HomeTax card registration process described above, the IRS will be automatically notified every time you top up your card with cash at a convenience store or subway station. There's no need to keep a paper receipt or enter your number every time, which is why HomeTax registration is essential.
Q5 I can't see my cash receipt history in Toss right away.
the cash receipt history displayed in the Toss app is taken from the National Tax Service's Home Home. Normally, there is a time difference of one to two days (D+1, D+2) between the issuance of the cash receipt and the National Tax Service's computer, and then it is linked to the Toss app.don't panic if you don't see it immediately after topping up, just check back in 2-3 days. if you don't see it after a week, you should double-check that your HomeTax registration is working.
chapter 6 Saving money on public transportation in 2025 and the future of Setech
6.1 K-Pass vs. Climate Pass: Which is better?
in 2025, not only will the Climate Companion Card be activated, but also the Ministry of Land, Infrastructure, and Transport's K-Pass (The K-Pass). The K-Pass is a cash rebate program that provides a percentage (20-53%) of the amount spent, while the Climate Pass is an unlimited pass. in terms of tax deductions, the K-Pass is also a public transportation deduction for credit/debit card purchases. what's important is your transportation pattern. if you're a Seoul resident who consistently uses public transportation at least 15 times a month, and your monthly transportation expenses exceed 80,000 won, you may be better off with the unlimited benefits and tax deduction of the Gifu Companion Card. on the other hand, if you travel longer distances and use local buses, the K-Pass's reimbursement benefits may be more beneficial. the tax credit benefits are strong for both cards, so the registration process is mandatory no matter which card you use.
6.2 Be flexible with policy changes
the government changes tax laws every year. it will be interesting to see how long the 80% transit deduction will remain in place, or if it will be expanded, in the year-end tax bill. But one thing that remains constant is the government's direction to push tax benefits to transit users. in the fight against the climate crisis and to achieve carbon neutrality, these benefits are here to stay.
conclusion: The privilege of the unwashed masses
the Climate Alliance Card is a great tool in itself, saving you tens of thousands of won per month on transportation costs. but when you add the wings of a tax deduction, it can be worth hundreds of thousands of won during tax season. with a transit deduction rate of up to 80% compared to a credit card deduction rate of just 15%, it's a powerful weapon that can lower your tax bracket and reduce the amount of tax you owe.
all of these benefits start with one small action: registering with the IRS at home. so reach into your wallet, pull out your Climate Alliance card, turn on your smartphone, and spend just three minutes today. those three minutes of effort you put into registering today will come back to you in the form of a pleasant bonus in your paycheck next February or March. The hassle is momentary, but the joy of the refund is forever in your bank account.
key takeaways You must register your physical Climate Alliance card with HMRC HomeTax to receive the benefit at tax time, so do it now
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