Trade-off between Child Allowance and exemption of income tax
You can apply an exemption of your income tax if you have dependent family members such as your spouse, parents or brothers, who live their lives with your income.
However, as for your children you can apply an exemption of your income tax only if they are over age 16.
Japanese local governments grant Child Allowance (児童手当, Jido Teate) to each of their registered children under age 16 (10,000yen to 15,000yen per one registered child, except for high-income earners, who are granted 5,000yen per one child). Children at age 16 or over are out of this allowance, but their parents can apply an exemption of income tax instead.
Children living out of Japan cannot receive Child Allowance (basically)
Child Allowance is granted, though, to only children who live inside Japan.
Children who live out of Japan basically cannot receive this allowance. But if they are sent to an oversea school for the purpose of their education, then they can receive the allowance for a certain period (*).
(*) To receive Child Allowance with studying oversea, children need to have a record to have resided in Japan at least 3 years before starting a life out of Japan. Children who study out of Japan can receive Child Allowance for 3 years, and no further.
Many non-Japanese employees reside in Japan leaving their family members at their home countries. They can apply exemptions of their income taxes for their dependent spouse, parents, brothers, or children over age 16. To apply an exemption of income tax for oversea family members, you need to submit a set of documents. For details please see this article in our blog.
For Detailed Information..
- About Child Allowance (Kyoto City Office, External Link)
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