[2026 Edition] Resident Tax Exemption Criteria and Preferential Measures

Recently, I have been receiving more questions from clients and people around me about the "resident tax exemption criteria," so I have summarized them as a memo.

Resident tax is a "deferred payment" system calculated based on the "previous year's income." This article explains based on income from January to December 2025, whether you qualify for resident tax exemption from June 2026 to May 2027. Please check it against your own situation!

1. The "Tax Exemption Line" raised from fiscal year 2026

Due to the fiscal year 2025 tax reform, the minimum guaranteed amount for the employment income deduction has been raised from 550,000 yen to 650,000 yen.
As a result, the tax exemption criteria for fiscal year 2026 (based on 2025 income) are as follows.

• Single person with only employment income: Annual income of 1 million yen or less ⇒ expanded to 1.1 million yen or less (in the case of Grade 1 areas such as the 23 wards of Tokyo)

• Person supporting a spouse with only employment income: Annual income of approx. 1.55 million yen ⇒ expanded to 1.66 million yen or less (in the case of Grade 1 areas such as the 23 wards of Tokyo)

• Single person aged 65 or older with only pension income: Pension income 1.55 million yen or less

• Person aged 65 or older supporting a spouse with only pension income: Pension income 2.11 million yen or less

Due to this revision, even if you were previously in a taxable income bracket, if your 2025 income falls within these new criteria, you may be newly certified as a "resident tax-exempt household" starting in fiscal year 2026.

However, one thing to be careful about is that to become a resident tax-exempt household, everyone in that household must meet the resident tax exemption criteria.

For example, for a household of a couple aged 65 or older, both with only pension income, the husband's pension income must be 2.11 million yen or less (the criteria for someone supporting a spouse), and the wife's pension income must be 1.55 million yen or less (the criteria for a single person).

2. Timing of reflection in preferential measures

The determination results based on income from January to December 2025 will be finalized in the "Resident Tax Determination Notice" or "Taxation (Tax Exemption) Certificate" that arrives around June 2026.
Based on this finalized status, the following preferential measures will be reflected.

• High-Cost Medical Expense Benefit System: The self-pay cap for the high-cost medical expense benefit system for resident tax-exempt households is 36,900 yen (from August 1, 2026), which is more favorable than for general households.

• Reduction/Exemption of National Health Insurance Premiums: The per-capita portion of National Health Insurance premiums is reduced by 20% up to a maximum of 70% depending on income, and long-term care insurance premiums are also reduced to about 30% of the standard amount.

• Reduction of burden for nursing care and welfare services: In addition to the upper limit for "High-Cost Long-Term Care Service Fees" under long-term care insurance being set at 24,600 yen per month, the usage fees for disability welfare services will have an upper limit of 0 yen.

• Support for educational expenses: In addition to children aged 3 to 5, childcare fees for children aged 0 to 2 will also be free of charge. Furthermore, for higher education such as universities, individuals will be eligible for the "New System for Higher Education Support," which provides both tuition and admission fee exemptions along with grant-type scholarships.

• Exemption or reduction of fixed costs: If conditions are met, such as being a tax-exempt household with a family member who has a disability, NHK broadcasting fees will be fully exempted, and depending on the local government, reduction or exemption systems for water bills and waste disposal fees may also be available.

• Provision of benefits: When local governments provide their own cash benefits as a measure against rising prices, tax-exempt households are given priority.

3. "How to perceive income" and time lags to be aware of

• Income subject to assessment: In addition to salary and pensions, if stock dividends or capital gains are included in a tax return, they are added to income and may affect the tax-exemption determination. On the other hand, survivor's pensions and disability pensions are "non-taxable income" and are therefore not included in the assessment.

• Current income decreases are not reflected: Even if income has dropped sharply due to retirement or unemployment in 2026, if income from January to December 2025 exceeded the criteria, the household will be treated as a taxable household for the 2026 fiscal year. However, individual reduction or exemption systems (such as for National Health Insurance premiums or university education support) may be available for households experiencing sudden changes in financial circumstances.

• Household-based assessment: To be certified as a resident tax-exempt household, not only the head of the household but all household members must meet the tax-exemption requirements. If even one person is a taxpayer, the preferential measures for the household as a whole cannot be received.