Medical Expense Deduction Japan 2026: Complete Guide to the 100K Threshold

Disclaimer: This article provides general information only and does not constitute tax or legal advice. Please consult a licensed tax professional for advice specific to your situation. Information is current as of January 2026.

Disclosure: This article is published on the Denpyo blog. Denpyo provides receipt management and expense tracking services.

Introduction

"I spent a lot on medical care this year... I heard I can get some back through tax filing, but how?" "Do I really need to spend over 100,000 yen?" "I might have thrown away my hospital receipts..."

The medical expense deduction (iryouhi koujo) is a critical tax benefit that can return tens of thousands to hundreds of thousands of yen to taxpayers who know how to use it. However, due to its complexity, many eligible taxpayers miss out on refunds they deserve.

This guide provides a comprehensive, up-to-date explanation of medical expense deductions for the 2026 tax year, from basic eligibility to e-Tax filing procedures.

What You Will Learn

• Which medical expenses qualify (and which do not)
• The truth about the "100,000 yen threshold"
• How to aggregate family medical expenses
• Step-by-step e-Tax filing instructions
• Medical Expense Deduction vs. Self-Medication Tax System
• Refund simulation and calculations

1. What Is the Medical Expense Deduction?

1.1 Basic Mechanism

The medical expense deduction allows taxpayers to deduct medical expenses exceeding a certain threshold from their taxable income when those expenses are paid within a single calendar year (January 1 to December 31).

• Income deduction (not a tax credit)
• Requires final tax return (kakutei shinkoku) - cannot be applied through year-end adjustment
• Refund claims can be filed from January 1 of the following year

Source: NTA Tax Answer No. 1120

1.2 Deduction Calculation Formula

Medical Expense Deduction = Medical Expenses Paid - Insurance Reimbursements - Threshold (100,000 yen or 5% of income)

The maximum deduction is 2,000,000 yen.

1.3 The Truth About the "100,000 Yen Threshold"

The common belief that "you need 100,000 yen in medical expenses to qualify" is only half true.

Example: If your total income is 1,500,000 yen, your threshold is 1,500,000 x 5% = 75,000 yen. This means medical expenses of 80,000 yen would qualify for the deduction.

Part-time workers and those with lower incomes may qualify for medical expense deductions even with expenses under 100,000 yen.

2. Eligible and Ineligible Medical Expenses

2.1 Eligible Medical Expenses

Source: NTA Tax Answer No. 1122

2.2 Ineligible Medical Expenses

When in doubt, ask yourself: "Is this for treatment or for cosmetic/preventive purposes?" Treatment-related expenses are generally eligible.

2.3 Common Items FAQ

3. Aggregating Family Medical Expenses

3.1 "Living Together as One Household"

Medical expense deductions can include expenses for family members living together as one household (seikatsu wo itsu ni suru).

• Spouse, children, and parents living together
• Family members living separately but financially supported through remittances
• Spouse on business assignment living separately
• Children living alone but supported for education and living expenses

Source: NTA Tax Answer No. 1180

3.2 Who Should File?

Family medical expenses should generally be claimed by the highest income earner for maximum tax savings.

Example: Medical expense deduction of 200,000 yen

Filing under the husband saves an extra 20,000 yen. However, if one spouse has income under 2,000,000 yen, their lower threshold (5% of income) might make it more advantageous for them to file instead.

4. Calculation Methods

4.1 Basic Formula

Medical Expense Deduction = (A) Total Medical Expenses - (B) Insurance Reimbursements - (C) Threshold

• (A) Total medical expenses for the year
• (B) Insurance reimbursements (high-cost medical care benefits, insurance payouts, etc.)
• (C) Threshold (lesser of 100,000 yen or 5% of income)

4.2 Calculation Examples

Case 1: Annual income 5,000,000 yen, medical expenses 500,000 yen, insurance reimbursement 100,000 yen

Case 2: Annual income 1,500,000 yen (taxable income 1,000,000 yen), medical expenses 80,000 yen

Even expenses under 100,000 yen can qualify for refunds.

4.3 Important: Insurance Reimbursement Rules

Insurance reimbursements are only deducted from the specific medical expense they cover.

Example: Childbirth costs 500,000 yen (lump-sum birth allowance 420,000 yen received), cold treatment 10,000 yen

• Incorrect: (500,000 + 10,000) - 420,000 = 90,000 yen
• Correct: (500,000 - 420,000) + 10,000 = 90,000 yen

Even if the childbirth expense calculation results in a negative number, you cannot subtract the excess from other medical expenses.

5. Medical Expense Deduction vs. Self-Medication Tax System

5.1 What Is the Self-Medication Tax System?

Introduced in 2017, this system allows deductions when you purchase specific OTC medications exceeding 12,000 yen annually.

5.2 Which Should You Choose?

You cannot use both systems simultaneously.

Source: NTA Tax Answer No. 1129

6. How to File: Step-by-Step Instructions

6.1 Required Documents

• Medical expense receipts (or medical expense notification from health insurer)
• Withholding tax certificate (gensen choshuhyo)
• My Number Card (for e-Tax)
• Bank account information for refund deposit

6.2 e-Tax Filing Steps

Step 1: Access the NTA Tax Return Preparation Corner

Step 2: Select "Start New" then choose "e-Tax" or "Paper Filing"

Step 3: Enter income information (from your withholding certificate)

Step 4: On the income deduction screen, select "Medical Expense Deduction"

Step 5: Choose input method

• Medical expense notification: Use the notification from your health insurer (easiest method)
• Enter from receipts: Input individually or use the medical expense summary form

Step 6: Enter medical expense details

• Name of person who received treatment
• Name of hospital/pharmacy
• Type of medical expense
• Amount paid
• Insurance reimbursement amount

Step 7: Review deduction amount and submit

6.3 Receipt Storage Requirements

When filing via e-Tax, receipt submission is not required, but you must keep receipts for 5 years. These must be produced if requested by the tax office.

Denpyo makes storing medical receipts easy - simply photograph them with your smartphone for secure digital storage. This ensures compliance with the 5-year retention requirement without the hassle of physical filing.

7. What If You Do Not Have Receipts?

7.1 Use Your Medical Expense Notification

The "Medical Expense Notification" (iryouhi no oshirase) from your health insurance association can substitute for receipts. However, it must include:

• Name of the insured person
• Month and year of treatment
• Name of patient who received treatment
• Name of hospital/pharmacy
• Amount paid by the insured

7.2 Request Receipt Reissue

Lost receipts can often be reissued by hospitals and pharmacies (a fee may apply).

7.3 Transportation Expense Records

Transportation costs to medical facilities can be deducted even without receipts. Keep records of:

• Date of visit
• Transportation method used
• Route/stations
• Amount

Source: NTA Medical Expense Deduction Statement Guide

8. Refund Simulation

8.1 Estimated Refunds by Medical Expense Level

For taxpayers in the 20% income tax bracket (taxable income 3,300,000-6,950,000 yen):

Additional savings of approximately 10% apply to resident tax (separate from income tax).

8.2 Childbirth Year Refund Example

Years with childbirth often involve high medical expenses, making significant refunds possible.

Model Case: Delivery costs 600,000 yen, lump-sum birth allowance 500,000 yen, prenatal checkups 50,000 yen

9. Frequently Asked Questions

Q1: What if I forgot to claim last year?

A: Refund claims can be filed up to 5 years retroactively. For 2024 expenses, you can file until December 31, 2029.

Q2: Are insurance-covered expenses eligible?

A: Yes, your out-of-pocket portion qualifies. The 30% copayment you actually pay is deductible.

Q3: How does high-cost medical care interact with this?

A: Amounts reimbursed through high-cost medical care (kougaku ryouyouhi) must be subtracted when calculating your medical expense deduction. Only actual out-of-pocket expenses qualify.

Q4: What about dental self-pay treatments?

A: Treatment-purpose expenses (implants, dentures, etc.) qualify. For borderline cases like gold crowns or cosmetic ceramics, consult your tax office for guidance.

Q5: What if family members paid separately?

A: Regardless of who actually paid, expenses for "family members living as one household" can be aggregated. The highest earner typically files the claim.

Summary

Key points to remember about medical expense deductions:

• The 100,000 yen threshold is not absolute: Those with income under 2,000,000 yen use 5% of income as the threshold
• Family expenses can be combined: Include all household members living together
• Higher earners get bigger refunds: Higher tax rates mean larger refund amounts
• Medical notifications can replace receipts: Use the notification from your health insurer
• File up to 5 years retroactively: Recover missed deductions from previous years

If you had significant medical expenses this year, be sure to file your tax return and claim your refund. Denpyo helps you manage medical receipts alongside everyday business expenses, making tax return preparation significantly easier.

References and Sources

• NTA Tax Answer No. 1120 - When You Pay Medical Expenses
• NTA Tax Answer No. 1122 - Medical Expenses Eligible for Deduction
• NTA Tax Answer No. 1129 - Self-Medication Tax System
• NTA Medical Expense Deduction Statement

Last Updated: January 2026