Which Care Costs Count for Japan's Medical Expense Deduction: The Iryohi Kojo Rules for LTCI Services

Two Different Deductions, One Word "Care"

Japan's medical expense deduction (iryohi kojo) is a separate mechanism from the disability tax certificate discussed elsewhere on this site, and the two can be claimed together.

If someone in your family searched "medical expense deduction" and "care costs" together, they were probably trying to work out whether a parent's long-term care insurance (LTCI) bills belong on a Japanese income tax return at all. They do, but not automatically and not at a flat rate. The National Tax Agency (NTA) treats each LTCI service differently depending on which facility type or service category it falls under, and getting this wrong either leaves money on the table or triggers a correction notice later.

This is a different question from the one covered in pension and tax for foreign retirees in Japan, which deals with how a retiree's pension income itself gets taxed. That article is about money coming in. This one is about money going out: care costs you already paid, and how much of that payment reduces your taxable income. The two can appear on the same tax return without conflicting.

It also differs from the disability tax certificate route some families use, which lowers taxable income through a fixed disability exemption tied to a certified disability level. The medical expense deduction instead reimburses a share of costs actually paid in the year, receipt by receipt. A family can claim both in the same filing if the parent qualifies for each, since one adjusts for disability status and the other for verified medical-type spending.

Before working through the service-by-service rules, it helps to know who this is for. To use this deduction at all, the person filing the return has to be filing a Japanese income tax return as a resident taxpayer, generally someone living and paying tax in Japan, whether that is the parent themselves, a spouse, or an adult child who lives with or supports the parent financially. A family member sending money from overseas who does not file a Japan return cannot claim the deduction directly, even if they are the one who actually paid the bill.

Which Family Member Can Claim It

Japan's tax code lets one filer combine care costs paid for any family member they support financially, whether or not that person lives in the same house.

The legal test is "seikei wo itsu ni suru" (生計を一にする), meaning the filer and the family member share a household budget in practice, not that they live under one roof. A married couple where one spouse works and one does not qualifies. So does an adult child who does not live with a parent but sends money regularly enough that the parent's living costs depend on it. Whether the parent counts as a dependent for the separate dependent exemption is not the test; the household-budget link is.

In practice this means a filer living in Tokyo who wires money monthly to a parent's account in a regional city, and who paid or reimbursed the parent's LTCI facility bill from that account, can generally fold the parent's medical and care costs into their own return. What does not work is a family member overseas who never files a Japanese return trying to claim the deduction themselves; the return still has to belong to someone filing as a Japan taxpayer.

Whether services fall under medical insurance or long-term care insurance in Japan does not by itself decide deductibility. Some LTCI-covered services deduct in full, some deduct at half, some deduct only when paired with a medical-type service in the same month, and some never qualify. The next part works through the facility and home-service categories in the order the NTA actually splits them.

Facility Stays: Tokuyo Versus Rouken

A resident's family deducts only half of self-paid facility costs at a tokuyo, but the full self-paid amount at a rouken or care medical institution.

The NTA splits residential facilities into two deduction tiers. At a tokubetsu yougo roujin home (tokuyo, special nursing home) or comparable community-based residential facility, the family can deduct one half of the self-paid facility service costs, meaning care fees, food costs, and housing costs combined, generally, per NTA Tax Answer No. 1125. At a kaigo roujin hoken shisetsu (rouken, care health facility), a kaigo iryoin (care medical institution), or a former long-term care sanatorium ward, the family can deduct the full self-paid amount of the same three cost categories.

The reasoning is that a rouken and a care medical institution are built around medical management and rehabilitation staffed by doctors and nurses, so the NTA treats the whole self-paid stay as medical in character. A tokuyo is built more around daily living support, so only half of the bill is treated as medical for deduction purposes, even though care and nursing staff are present.

Two categories of facility cost never qualify at either tier: items the NTA classifies as ordinary daily living expenses, such as haircuts, personal grooming services, and convenience items used in daily life, and facility-set "special service fees" layered on top of the standard care, food, and housing charges. A private room upgrade only counts as deductible when the facility can show it was medically necessary rather than a lifestyle choice, generally decided case by case.

One number families miss: if a stay also produced a high-cost care refund, the reimbursed amount reduces the deductible total for that year. A family that used the mechanism described in Japan's high-cost care refund needs to net that refund out of the facility bill before calculating the deduction, not deduct the full billed amount and separately bank the refund.

Home Services: Which Ones Ride on Which

Home-visit nursing and home rehabilitation always qualify, while home help and home bathing only qualify when a medical-type service appears on the same month's care plan.

For in-home (kyotaku) services, NTA Tax Answer No. 1127 splits services into three groups instead of two. Medical-type services deduct on their own: home-visit nursing (houmon kango), home rehabilitation (houmon rehabiritation), and home care management guidance from a physician (kyotaku ryouyou kanri shidou), along with facility-based day rehabilitation and short-term therapeutic stays built around medical management. These count as medical expenses regardless of what else is on the care plan.

Welfare-type services, including home help (houmon kaigo, excluding the life-support-only portion) and home-visit bathing (houmon nyuyoku kaigo), only qualify for the deduction when a medical-type service from the first group appears on the same month's care plan. In practice this means two families using what looks like similar home help can end up with different deduction outcomes purely because one care plan also includes home-visit nursing that month and the other does not.

A third group never qualifies regardless of what else is on the plan: life-support-focused home help on its own, dementia group-home shared living costs, standalone facility residency fees already covered under Part 1, and welfare equipment rental. If your parent uses a rented hospital bed or wheelchair through the system described in welfare equipment in Japan, that rental fee itself is not part of this deduction even in a month with medical-type services present.

The document that proves which group a given month's services fall into is the care plan's "service provision ticket" (rijukyu-hyou), the monthly schedule your care manager issues. Keeping that ticket alongside receipts, rather than relying on memory of what was used, is generally the difference between a clean filing and a guess.

Diapers: The Certificate Rule Families Get Wrong

Diaper costs qualify only with a physician's diaper-use certificate in the first claiming year, and a simplified municipal confirmation in later years.

Diaper costs (omutsu-dai) for someone who is bedridden are deductible, but only with documentation, not on receipts alone. NTA guidance on diaper costs for bedridden individuals sets the underlying condition as roughly six months or more of bedridden status under a physician's ongoing care. In the first year a family claims the deduction, they generally need an omutsu shiyou shoumeisho (diaper-use certificate) issued by the treating physician confirming that diapers are medically necessary.

From the second year of claiming onward, most municipalities let a family substitute a simpler confirmation. Instead of a new physician certificate every year, the family can submit a copy of the physician's opinion statement (shui-isho) already filed for the LTCI certification, or a municipal document confirming that opinion statement's content, generally as described on city pages such as Yokohama's diaper-deduction confirmation guidance. This is why a family filing for the second or third year should ask their city's elder care division for this confirmation document rather than going back to the doctor for a fresh certificate each year.

One detail that catches families off guard: the opinion statement used for the confirmation does not have to be from the exact year of the diaper purchase. If the parent's current care-level certification runs 13 months or longer and no new opinion statement was issued in the claim year, a statement from the prior year or the year before that can still support the claim, generally, as long as the municipality confirms it.

Practically, this means the sequence matters. Ask the attending physician for the certificate the first year, ask the municipal LTCI office for the confirmation document every year after, and keep both alongside the diaper receipts, because the receipts alone will not satisfy the deduction on their own.

The Threshold, the Cap, and When to File

The deduction generally applies to medical and qualifying care costs above ¥100,000, or 5% of total income for filers under ¥2,000,000, up to a ¥2,000,000 deduction cap, and salaried filers can claim it up to five years back.

The medical expense deduction is not claimed on every yen spent. The deductible amount is generally the total qualifying medical and care costs paid in the calendar year, minus any insurance reimbursements such as a high-cost care refund, minus a threshold of ¥100,000, or 5% of total income for filers whose total income is under ¥2,000,000. The resulting deduction is capped at ¥2,000,000 per return. A filer combining a parent's facility bill, diaper certificate, and home-visit nursing costs across a full year is the kind of case where the total more easily clears the threshold than a single service alone would.

The standard final tax return filing window in Japan runs from mid-February to mid-March. Salaried employees who are due a refund from this deduction, rather than owing additional tax, are not bound by that window; a refund claim (kangen shinkoku) can generally be filed for up to five years from January 1 of the year after the costs were paid. This means a family who paid a parent's facility bill last year and never filed for the deduction has not necessarily missed the opportunity.

Required documents generally include the completed tax return form, receipts from the facility or service provider, the diaper certificate or municipal confirmation where relevant, an income and withholding certificate, and bank details for the refund. Facilities issuing LTCI-related receipts are required to state the deductible portion on the receipt itself, so the paperwork usually tells you the qualifying amount rather than leaving you to calculate the facility-type split from Part 2 unaided; check the receipt line before assuming you need to redo the math.

The rules here change slowly but not never, and municipal diaper-confirmation procedures in particular vary by city. Generally, confirm current-year thresholds and required forms with the tax office (zeimusho) or a tax professional before filing, especially in the first year a household combines facility, home-service, and diaper costs on one return.

Keeping the Paperwork Trail Going

The receipts, service tickets, and certificates that support this year's deduction are the same records worth keeping for a level-change appeal or a facility move next year.

Once a household has assembled a year's worth of facility receipts, service provision tickets, and diaper documentation for this deduction, the same folder tends to matter again later, whether the parent's care manager revises the plan, the family disputes a certification result, or the parent later moves between a rouken and a tokuyo and the deduction share changes mid-year.

Because the facility-type split in Part 2 changes the moment a parent transfers from a rouken to a tokuyo, or the reverse, it is worth asking the new facility's office, at intake, to confirm in writing which deduction tier applies and to issue receipts marked with the deductible amount going forward, rather than assuming last year's rate still applies.

Overseas family members who are not the ones filing the Japan return still have a role: keeping copies of remittance records and receipts on their side means that whichever relative in Japan does file can substantiate the "seikei wo itsu ni suru" household-budget link if the tax office asks for it, since a paper trail of regular transfers is generally stronger evidence than a verbal description of the arrangement.