Municipal Resident Tax and Tokyo Metropolitan Resident Tax Donation Tax System (Hometown Tax Payment)

If you make a donation to the prefecture or municipality for the individual resident tax (prefectural resident tax and municipal resident tax), you can apply for a deduction for donations from the individual resident tax (local tax) and income tax (national tax) for the amount exceeding 2,000 yen of that donation.

• Note 1: You can freely choose the prefecture or city/ward/town to which you wish to make a donation (for donations eligible for deduction, it does not have to be your hometown city/ward/town).
• Note 2: Regarding the donations related to the Great East Japan Earthquake, if they are donated to local governments through fundraising organizations (such as the Japanese Red Cross), they will be treated as "hometown donation funds."

• Support Donation for Inagi City (Furusato Tax)
  For those considering a donation to Inagi City

Applicable Deadline

Donations made between January 1 and December 31 each year
Note: Individual resident tax will be deducted from the individual resident tax for the following year after the donation, and income tax will be deducted from the income tax for the year the donation was made.

Eligible Donations

Donations to traditional local governments (prefectures, cities, towns, and villages), the prefectural community chest association of the address, the local branch of the Japanese Red Cross at the address, and to corporations designated by local governments through ordinances.

Overview

1 Deductible Limit for Donations (Limit for which Donation Deductions Apply)

30% of total income amount, etc.

2 Minimum Applicable Amount (Minimum Amount for Donation Deduction)

2,000 yen per year

Basic Deduction Amount

(Donation Amount - 2,000 yen) × 10%
Note: 10% consists of 6% Municipal Resident Tax and 4% Tokyo Metropolitan Resident Tax

Special Deduction for Furusato Tax

Donations to local governments (prefectures and municipalities) are eligible for additional special deduction amounts that are tax-deductible.

Deduction Amount for Donations to Local Governments

(1) Basic Deduction Amount

(Donation Amount - 2,000 yen) × 10%

(2) Special Deduction Amount

The smaller amount of A or B

1. (Donation Amount - 2,000 yen) × (90% - Income Tax's marginal tax rate × 1.021)
2. 20% of the resident tax income portion (for donations made in fiscal year 2014 and earlier, it is 10%)

Donation Deduction Amount

(1) + (2)

• Note 1: The marginal tax rate for Income Tax refers to the highest tax rate applicable to that individual. It ranges from 5% to 45% depending on taxable income.
• Note 2: In the case of donations to entities other than local public organizations, only the basic deduction amount applies.
  Annotation: For the deduction amount of donations specified by the ordinance, please refer to the information below.
• Note 3: If you are eligible for the deduction for donations, the portion for the Special Income Tax for Reconstruction will also be reflected, and the special deduction amount for hometown donations related to Municipal Resident Tax and Tokyo Metropolitan Resident Tax will be adjusted.

Designated Donations by Ordinance

A system has been established that allows prefectures and municipalities to add donations specified by ordinance from the deductible donations for Income Tax to the deductible donations for Municipal Resident Tax.

Donations Eligible for Deduction

Certain corporations that have a business office or office within the city among the deductible donations for Income Tax.

• Note: Among the donations eligible for Income Tax deductions, the specific corporations within the city are social welfare corporations and educational corporations. (In addition to the specified corporations eligible for donation tax deductions as designated by the ordinance, national university corporations and certified NPOs are also specified, but currently, there are none within the city).
• Note: This will be a deduction from the Municipal Resident Tax for the individual in the year following the donation.
• Note: Please check with the recipient of the donation or the City Hall Municipal Resident Tax Division to confirm whether the recipient is a qualifying organization for deductions.

Deduction Amount

The amount obtained by subtracting 2,000 yen from the donation amount will be subject to a 6% tax deduction from the Municipal Resident Tax.
Note: If the donation also qualifies as a deductible donation designated by Tokyo Metropolitan Government, a separate tax deduction will be applied from the Tokyo Metropolitan Resident Tax (4% of the amount obtained by subtracting 2,000 yen from the donation amount).

For information on the amount of hometown tax donation that is fully deductible (excluding 2,000 yen), please check the "Ministry of Internal Affairs and Communications Hometown Tax Portal Site."

• General Affairs Department Hometown Tax Portal Site(External Link)

How to file a declaration (A receipt issued by the donation destination is required for the declaration)

Those who declare deductions for donations for Income Tax and Individual Resident Tax

Please file your tax return at the tax office that has jurisdiction over your residence during the tax return period.

Note: Please also refer to the following sites.

• Tax Return Preparation Corner(External Link)
• Local Tax Joint Organization "Guide for Preparing Tax Returns for Those Who Made Furusato Tax Contributions"(External Link)

Those who declare only the deductions for individual resident tax that are subject to taxation without being subject to Income Tax

Please declare to the municipality where you reside on January 1st of the year following your donation.

Note: Receipts are required at the time of declaration, so please be sure to keep them.

If you are using the hometown tax donation one-stop service (applicable for donations made after April 1, 2015)

The One-Stop Special Exception System is a system that allows salaried employees and others who do not need to file a tax return to receive a tax deduction for donations without filing a tax return, under certain conditions, when making hometown tax donations.

For hometown donation funds made after April 1, 2015, you can apply to the municipality where you made the donation to receive the benefits of this system. If the One-Stop Special Exception System is applied, there will be no deduction for Income Tax, and the Municipal Resident Tax and Tokyo Metropolitan Resident Tax for the following year will be reduced. If there are any changes to the application form, such as a change of address, after applying for the special exception, you must submit a notification of change to the municipality where you made the donation by January 10 of the year following the hometown tax payment.

(Note) Those who made a hometown tax donation between January 1 and March 31, 2015, are required to file a final tax return.

Individuals not eligible for the One-Stop Special Exception System

Please note that those who fall under the following categories are not eligible for the One-Stop Special Provision System.

• Those who need to file an "Income Tax Return" or "Municipal Resident Tax and Tokyo Metropolitan Resident Tax Declaration" for purposes other than receiving deductions for hometown tax donations
• Those who file Income Tax returns
• Those who will file Municipal Resident Tax and Tokyo Metropolitan Resident Tax
• Those who have more than 5 donation destinations