When a family member passes away, the heirs file the deceased person's income tax return for that year on their behalf. This is the "quasi-final tax return." The deadline is within four months from the day after the day you learn of the start of the inheritance — stricter than an ordinary tax return. On the other hand, a parent living on a pension often does not need to file, and conversely there are many cases where a "refund" arises through the medical expense deduction and the like. From judging whether it is necessary to the procedures, we organize it here with sources from the National Tax Agency.
① Deadline: File and pay within four months from the day after the day you learn that the inheritance has started[National Tax Agency No.2022].
② Who needs it: When the deceased was a sole proprietor, had rental income, had salary over ¥20 million, had a pension over ¥4 million, and the like — that is, when a tax return would have been required had they been alive.
③ If the public pension is ¥4 million or less (and other income is ¥200,000 or less), a filing is often unnecessary. However, if a refund would arise through the medical expense deduction and the like, it is worth doing an optional refund claim (this one is not bound by the four months and can be done for five years).
④ When there are two or more heirs, attach an "appended table" jointly signed by all of them. The income tax paid is a debt deduction for inheritance tax, and any refund becomes inherited property.
Who "needs" and who "does not need" a quasi-final tax return
| Judgment | Examples of the deceased's situation |
|---|---|
| Needed | Had sole-proprietor or freelance income / had rental income from real estate / salary over ¥20 million / public pension over ¥4 million / income other than salary and pension over ¥200,000 / made a profit by selling stocks or real estate, etc. |
| Not needed | Pension of ¥4 million or less and other income of ¥200,000 or less / a single salary source settled by a year-end-adjustment equivalent, etc. |
| Not needed, but "worth doing" | Had large medical expenses due to hospitalization or nursing care / had income tax withheld from a pension or salary / the life insurance premium deduction and the like were not settled → you can recover it with a refund claim (within five years) |
The way of judging is the same as for an ordinary tax return (who must file a tax return). It is calculated on the income from January 1 of the year of death to the date of death. Also, if the person died before filing for the previous year (such as a death in January–March), the previous year's return must likewise be filed within four months[National Tax Agency].
Procedures and required documents
- Filer: The heirs (including comprehensive legatees). When there are two or more, in principle attach the "appended table to the income tax and special reconstruction income tax return of the deceased person" jointly signed by all of them[National Tax Agency].
- Where to submit: The tax office with jurisdiction over the deceased's place of residence (note that it is not the heirs' place of residence). You can also submit via e-Tax.
- Main documents: Withholding slip (for pensions, the Japan Pension Service sends a "for quasi-final tax return" slip after death), receipts for medical expenses, premium deduction certificates, business books, and so on.
- Treatment of income deductions: Social insurance premiums, life insurance premiums, medical expenses, and the like are eligible only for the portion the deceased paid up to the date of death. The spousal deduction and dependent deduction are judged based on the situation as of the date of death.
The relationship with inheritance tax (don't overlook this)
- Income tax paid → In calculating inheritance tax, it can be deducted from the estate as a debt deduction.
- Refunded tax → Include it in the inherited property as the deceased's property (subject to inheritance tax).
- If an heir pays hospital costs incurred after the date of death, they cannot be included in the medical expense deduction of the quasi-final tax return, but they are eligible for the debt deduction of inheritance tax. If the heir shared the same household budget, they may in some cases be included in the medical expense deduction of the heir's own tax return.
- For the overall inheritance schedule (inheritance tax is within ten months), see the basic exemption for inheritance tax and tax-saving measures.
FAQ
By when is the deadline for a quasi-final tax return?
You do both the filing and the payment within four months from the day after the day you learn that the inheritance has started. If you miss the deadline, you become subject to the additional tax for failure to file and to delinquency tax. That said, if the filing is only to receive a refund, you can submit it for five years regardless of the four months.
My parent who lived on a pension has died. Is a filing necessary?
If the public pension is ¥4 million or less a year and other income is ¥200,000 or less, no filing is necessary. However, if medical expenses were large due to hospitalization or nursing care, or if income tax was withheld from the pension, a refund claim often gets money back, so check once the withholding slip arrives.
What do we do when there are multiple heirs?
In principle, all heirs file in a single return with a jointly signed appended table attached. There is also a method where each heir submits separately, but in that case you must notify the other heirs of the contents of the filing.
Whose does the refund become?
It becomes the deceased's inherited property, and the heirs receive it in proportion to their statutory shares and the like. Because it is also included in what is subject to inheritance tax, be careful not to forget to include it when tallying the estate.
Data sources
- Quasi-final tax return (within four months / appended table / treatment of the previous year): National Tax Agency No.2022 Tax return when a taxpayer dies (quasi-final tax return) (in Japanese)
* This article is general information, not tax advice. For individual judgments and the relationship with inheritance tax, please confirm with a tax office or a tax accountant.