Differences between income tax and local resident tax under the revised tax reforms that is applied from 2025, and income requirements for tax exemptions and dependents

The changes to the income tax that takes effect from the fiscal year 2025 include:

• Increase in the basic deduction
• Increase in the employment income deduction
• Increase in the income requirements for spouse deductions and dependent deductions
• Creation of a special deduction for specified relatives

It's important to note that the revisions to the basic deduction do not apply to resident tax.

In addition, income tax exemption does not necessarily mean that someone is considered a dependent.

Therefore, it's necessary to keep in mind that there are different income limits for each category:

• Resident tax exemption limit
  (salary revenue of 1.1 million yen or less, total income of 450,000 yen or less)
• Income limit for dependent status
  (salary revenue of 1.23 million yen or less, total income of 580,000 yen or less)
• Income tax exemption limit
  (salary revenue of 1.6 million yen or less, total income of 950,000 yen or less)
• Income limit eligible for the special deduction for specified relatives
  (salary revenue of 1.88 million yen or less, total income of 1.23 million yen or less)
  (The income limit counted as a dependent for withholding tax purposes is salary revenue of 1.65 million yen or less, total income of 1 million yen or less)

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都築太郎税理士事務所/Tsuzuki Taro Tax Accountant Office

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