What are dependents under the tax act?

This page explains about dependents under the tax act.

Requirements for eligibility

Eligible individuals

All of the following requirements must be met.

• Sharing living expenses with the taxpayer
• Any of the following must be applicable
  • A spouse (excluding common-law spouse), a relative (a relative by blood within the 6th degree and a relative by affinity within the 3rd degree)
  • A child you have been charged to raise by the prefectural governor (meaning a foster child)
  • An elderly person you have been charged to care for by the mayor of the municipality
• Annual total earnings amount is 480,000 yen or less (950,000 yen or less for a spouse)

*“Dependents under the tax act” with regard to a spouse in SmartHR are “A spouse who qualifies for tax deduction at the source” as stated in the Application for (Change in) Exemption for Dependents. *Also applies to dependent relatives under the age of 16.

Examples of earnings requirements

• Person whose annual employment income is 1.03 million yen or less (1.5 million yen or less for a spouse)
• Person under the age of 65 with an annual pension income (public pension) of 1.08 million yen or less
• Person 65 years of age or over with an annual pension income (public pension) of 1.58 million yen or less
• Person whose business income is annual income - required expenses = 480,000 yen or less

*Public pension includes the national pension, employee’s pension, and mutual aid pension.

Reference

No. 1180 Dependent deductions | National Tax Agency

How one year is defined

January to December

Status in SmartHR (from 2020)

Please refer to the information below before registering settings for dependents under the tax act in SmartHR. The status of “A person eligible for special exemption for spouses” and “Unknown” can be selected only when editing family information from employee information or registering as a batch using a CSV file.

For a spouse

Status	Eligibility
Not a dependent	Earnings amount over 1.33 million yen, when there are other dependents in the family, etc.
Dependent (a person who qualifies for tax deduction at the source)	Person whose earnings amount is up to 950,000 yen (up to 1.5 million yen in employment income)
A person eligible for special exemption for spouses	Person whose earnings amount is between 950,000 yen and 1.33 million yen (between 1.5 million yen and 2,015,999 yen in employment income)
Unknown	When the dependency status is unknown

For other than a spouse

Status	Eligibility
Not a dependent	Earnings amount over 480,000 yen, when there are other dependents in the family, etc.
Dependent (a person who qualifies for tax deduction at the source)	Person whose earnings amount is up to 480,000 yen (up to 1.03 million yen in employment income)
Unknown	When the dependency status is unknown

The earnings amount requirements were revised from 2020.

For details, please refer to Revisions to the requirements of the total earnings amount for dependents to receive various deductions (from 2020) | National Tax Agency.