If Your Spouse or Dependent Received a Retirement Allowance

Starting with the 2023 form, the “Application for (Change in) Exemption for Dependents” now includes new fields under Resident Tax Information for spouses or dependents who received a retirement allowance. (This change was introduced as part of the 2022 tax reform).

This page explains what these new fields mean and what you need to do if it applies to you.

Read This Page If Either Applies:

• If your spouse’s total earnings would have been less than 1.33 million yen, but their total earnings exceeded this amount due to receiving a resignation allowance and no longer qualify them as a dependent
• If your dependent’s total earnings would have been less than 580,000 yen, but their total earnings exceeded this amount due to receiving a resignation allowance and no longer qualify them as a dependent

About the New Fields

From the 2023 form onward, two new fields appear under Resident Tax Information on the “Application for (Change in) Exemption for Dependents”:

1. Spouse/Dependent Who Received a Retirement Allowance (退職手当等を有する配偶者・扶養親族): Fill this in if you have a spouse (living in the same household and earning 1.33 million yen or less, excluding retirement income) or a dependent who received a retirement allowance or similar payment.
2. Widow(er) or Single Parent: Check this box if you have a dependent whose total estimated earnings (excluding retirement earnings) is 580,000 yen or less, making you eligible as a widow(er) or single parent.

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Why These Fields Were Added

The way retirement earnings are counted differs between income tax and resident tax. If your spouse or dependent received a retirement allowance, their total earnings excluding that retirement income might still fall within the dependent threshold (1.33 million yen or less for a spouse; 580,000 yen or less for a dependent). In that case, the person would no longer qualify as a dependent for income tax, but would still qualify for the resident-tax dependent deduction. Because of this difference, some dependents who should have been eligible for the resident-tax deduction weren’t being counted. The new fields were added to fix this inconsistency.

What to Do

If your spouse or dependent received a retirement allowance, follow the steps below so the resident-tax deduction is applied correctly.

For a Spouse

1. On question 54 (“Please enter information about your spouse”), select [Next year] or [Not a dependent].
2. Check the box that says “No longer a dependent because they received a resignation allowance this year”
3. Enter your spouse’s information

Your answers will appear in the Spouse/Dependent Who Received a Retirement Allowance field.

For a Dependent

If a dependent family member was disqualified from dependent status because of a retirement allowance, you still need to answer as having a dependent for tax purposes.

1. Answer “Yes” on question 38 (“Do you have dependents as defined in Japanese tax law?”)
2. On question 40 (“Please enter information for your dependents (other than your spouse)”), select [Next year] or [Not a dependent].
3. Check the box that says “No longer a dependent because they received a resignation allowance this year”
4. Enter your dependent’s information

Your answers will appear in the Spouse/Dependent Who Received a Retirement Allowance field.

Notes for Administrators Editing Data Directly

If the employee doesn’t complete the survey and the administrator edits the collected data manually, the following scenarios aren’t supported:

• Cases where the person isn’t a widow(er) for income tax but is for resident tax
  • “Widow(er)” can’t be displayed under “Resident Tax Information” on the form. Please write it in by hand.
• Cases where the person isn’t a single parent for income tax but is for resident tax
  • The display on the form isn’t affected. However, the “Employee Information CSV” won’t show the reason under “Spouse/Dependent Who Lost Dependent Status Due to a Retirement Allowance (Widow/Single Parent).”

How It Appears on the Form

Example: If a dependent has the following income:

• Employment income — 1 million yen (= 450,000 in earnings)
• Retirement allowance — 10 million yen (= 300,000 in earnings)

Then: - The dependent’s information won’t appear in section B “Dependent Eligible for Deduction” - It will appear in the “Spouse/Dependent Who Received a Retirement Allowance” field instead If the employee qualifies as a widow(er) or single parent, the system will automatically determine this based on whether there’s a dependent who received a retirement allowance.

If more than one spouse or dependent meets these conditions, multiple declaration forms will be generated.