Japan’s Medical Expense Deduction Explained

If your out-of-pocket medical costs in Japan pass ¥100,000 in a calendar year, the excess comes off your taxable income and you get income tax back. There is no itemizing decision to make — unlike the US, where medical costs only help if you itemize on Schedule A and clear 7.5% of AGI, Japan applies a flat ¥100,000 floor to everyone. Your employer will not do this for you: it takes a final tax return, and you can go back five years.

The medical expense deduction (iryohi kojo) is one of the most commonly missed refunds among foreign residents in Japan. It sits outside the year-end adjustment your company runs, so if nobody tells you, nothing happens. What counts is also broader than most people assume — and narrower in a few places where you would expect it to be generous.

What actually comes back

This is a deduction from income, not a cash rebate. What lands in your account is the deduction multiplied by your marginal tax rate, so the same ¥300,000 is worth more to a higher earner. In a two-income household it usually pays for the higher earner to gather the family’s medical costs and claim them.

The window is what you actually paid between 1 January and 31 December. It follows the payment date, not the treatment date, so a December visit settled in January belongs to the following year.

The US comparison, briefly

The practical difference is who benefits. In the US a moderate earner often never reaches 7.5% of AGI, or takes the standard deduction and never itemizes at all. In Japan the bar is a fixed yen amount, so one bad year of dental work or a single hospital stay can be enough regardless of what you earn.

What counts and what does not

Three things people miss

Travel to and from treatment counts. Train and bus fares qualify, and you can record the dates and routes rather than keeping tickets. Where a child needs someone with them, the accompanying person’s fare counts too. But taxi fares are not deductible except where public transport cannot be used, and petrol and parking for your own car never are.

Health checks have one important exception. Screenings are not deductible as a rule, but if a check finds a serious illness and you go straight on to treat it, the cost of that screening becomes deductible — it is treated like the consultation that precedes treatment. If something turned up at a checkup last year, go find that receipt.

Dental splits on materials and purpose. Gold and porcelain are regarded as ordinary dental materials, so treatment using them is deductible. Orthodontics qualifies where it is genuinely needed — the example given is correcting a child’s malocclusion so it does not impede their growth — while work done to improve appearance does not.

Subtract anything you were reimbursed

Insurance payouts and public benefits come off the total, and there is a rule about how they come off that people get wrong.

The usual candidates are the high-cost medical benefit, the childbirth lump sum, and hospitalisation payouts from private insurance. If you claimed the high-cost medical benefit in a given month, that amount has to come out before you calculate.

Parents and family living abroad

This is the question expats actually have, and the answer is more generous than people expect. The requirement is simply that the costs were paid by you for yourself, your spouse, or other relatives whose household finances you share. Living together is not a condition — the tax agency treats people as sharing a household where, for example, one is living on money the other regularly sends.

What confuses people is the special documentation regime for non-resident relatives — the age 30-to-69 restrictions and the ¥380,000 remittance paperwork. Those rules are listed as applying to the dependent, spouse, special spouse, specified-relative and disability deductions. The medical expense deduction is not on that list, so the dependent-deduction age limits do not carry over to it.

In practice you still need to be able to show that you paid and that you share household finances. Keep remittance records and the local receipts, and if the amounts are significant, ask your tax office before you file. This is an area where the facts of your case decide the answer.

The self-medication alternative

There is a special regime for certain switch-OTC medicines: spend more than ¥12,000 in a year and the excess is deductible up to ¥88,000. You qualify only if you personally did one of the listed health activities, such as a checkup or a vaccination.

The catch is that it is either/or with the ordinary medical expense deduction. You choose one, and once chosen you cannot switch later by amending. It is only worth considering in a year when your medical costs fall well short of ¥100,000. The regime runs to 31 December 2026.

Five years is still open

A return filed purely to claim a refund, by someone with no obligation to file, can be submitted for five years starting 1 January of the following year. The 15 March deadline has nothing to do with it.

So if you have been in Japan a few years, have spent real money at clinics, and have never filed, you can look back over five years at once. If your health insurer sends you a medical expense statement, the paperwork gets considerably shorter.

You will need the deduction statement, the tax return itself, and your withholding slip. Receipts are not submitted, but keep them for five years.

This article is for general information only and is not medical, tax or legal advice. Rules and amounts change, and outcomes depend on individual circumstances. Confirm with your insurer, tax office, Hello Work, or municipal office before filing.

Sources: National Tax Agency No.1120, No.1122, No.1128, No.1129, No.2030; National Tax Agency Q&A on deductions for non-resident relatives (revised June 2025); IRS Topic No. 502, Medical and Dental Expenses.