Tax & Filing 2026

Side Income and Furusato Nozei in Japan: How Your Limit Changes, and the One-Stop Exception Trap

What salaried side earners need to know before year-end, drawn from what MIC and the NTA have published on furusato nozei (hometown tax donation).

20%

Cap on the special portion: 20% of income-based resident tax

Max municipalities for the one-stop exception

Jan 10

One-stop form deadline (following year)

9 slides

Your limit is set by profit, not sales

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Did you enter only your salary in the simulator? Side profit is not counted unless you add it.

The deduction has three parts: income tax, the basic portion of resident tax and the special portion. As long as the special portion stays within 20% of your income-based resident tax, everything above ¥2,000 is credited in full (MIC).

💡 Income-based resident tax includes side income, so more profit means a higher limit

A miscellaneous-income loss cannot offset your salary

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①

Only losses from real estate, business, timber and capital gains income can be offset (NTA No.2250)

②

A miscellaneous-income loss cannot be offset against other income (NTA No.1500)

③

Side business as miscellaneous income: a loss does not lower your limit (nor raise it)

④

Side business as business income: the loss is deducted from salary, and the limit may fall

💡 Your income category depends on the facts of your activity. If unsure, ask your tax office or a zeirishi

File a tax return and one-stop disappears

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①

One-stop is for salaried workers and others who need not file, giving to five or fewer municipalities

②

If you file a tax return, the one-stop exception does not apply (MIC)

⚠ List every donation that year on your return, including those you applied for. A donation left off is not deducted

"Under ¥200,000, no filing" is income tax only

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①

Even if side income of ¥200,000 or less spares you an income tax return, a separate resident tax declaration is needed

②

If you file a return for furusato nozei, include your side income too, in principle

③

Submitting a resident tax declaration also voids one-stop, so list your donations on it

How to claim, by situation

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Situation	Donation deduction	Side income
Side income over ¥200,000	List all donations on your tax return	Include in your tax return
¥200,000 or less, 5 or fewer municipalities	List all donations on your resident tax declaration	Separate resident tax declaration needed
¥200,000 or less, 6 or more municipalities	List all donations on your tax return	Include in your tax return

The points ban and two deadlines

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①

From October 1, 2025: soliciting donations through portal sites and the like that award points is banned (MIC revised its designation criteria)

②

Donations that count for the year: January 1 to December 31

③

One-stop forms must reach the municipality by January 10 of the following year

Four steps to avoid a year-end scramble

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①

Estimate your side profit for the year (not sales)

②

Enter your side income in the simulator to estimate your limit

③

Donate less than the estimate so a miss does not take you over

④

If side income will exceed ¥200,000, plan from the start to list every donation on your return, and keep the receipts

Your limit estimate = your side profit estimate

The limit is set by 20% of your income-based resident tax. What counts is income (profit), not sales

File a tax return and one-stop is void. Every donation goes on the return

Under ¥200,000, resident tax is still separate. Donate by December 31; one-stop forms by January 10 of the next year

※

These slides are general information, not tax advice. Your deduction limit and whether you need to file are individual determinations for your tax office, your municipality or a licensed tax accountant. Trading carries the risk of losing your principal

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