Japan to raise spousal deduction income threshold in 2026

Japan is set to implement significant changes to the tax system regarding spousal deductions starting in December 2026. Under the 2026 tax reforms, the income threshold for the spousal deduction will be raised. For individuals whose only income is salary, the threshold to qualify for the spousal deduction will increase from 103,000 yen (current) to 136,000 yen.

Additionally, the special spousal deduction will remain available for those with higher incomes, providing tiered benefits. For those with a total income of 9 million yen or less, the maximum special spousal deduction of 380,000 yen will apply to spouses with a salary income of up to 1.69 million yen.

These adjustments are part of broader shifts in tax policy and the handling of the 'dependency wall,' which affects how much part-time workers can earn before losing tax benefits. Experts note that these changes require careful attention during year-end tax adjustments to avoid losing eligible deductions.