Earthquake Insurance Premium Deduction Calculator
Enter your annual earthquake insurance and former long-term casualty insurance premiums to automatically calculate Japan's earthquake insurance premium deduction (income tax and resident tax).
The earthquake insurance premium deduction is an income deduction that lets you subtract a set amount from taxable income (for both income tax and resident tax) based on the earthquake insurance premiums you've paid (Article 77 of the Income Tax Act). For long-term casualty insurance contracts signed on or before December 31, 2006 with a policy term of 10 years or more and similar requirements, a transitional "former long-term casualty insurance premium deduction" calculation table applies instead. Enter the annual amount paid for each, and this tool will estimate your deduction.
Earthquake insurance premium deduction calculation table
| Annual premiums paid | Income tax deduction | Resident tax deduction |
|---|---|---|
| ¥50,000 or less | Full amount of premiums paid | Premiums × 1/2 |
| Over ¥50,000 | Flat ¥50,000 | Flat ¥25,000 |
The income tax cap is ¥50,000; the resident tax deduction is 1/2 of the premiums paid (capped at ¥25,000).
Former long-term casualty insurance premium deduction (transitional measure) calculation table
| Annual premiums paid | Income tax deduction | Resident tax deduction |
|---|---|---|
| ¥10,000 or less | Full amount of premiums paid | Full amount of premiums paid |
| Over ¥10,000, up to ¥20,000 | Premiums × 1/2 + ¥5,000 | Premiums × 1/2 + ¥2,500 |
| Over ¥20,000 | Flat ¥15,000 | Flat ¥10,000 |
This applies to long-term casualty insurance contracts signed on or before December 31, 2006 with a policy term of 10 years or more and a maturity refund. The caps are ¥15,000 for income tax and ¥10,000 for resident tax; when combined with the earthquake insurance premium deduction, the overall combined cap is ¥50,000 for income tax and ¥25,000 for resident tax.
Simulator
Tips
- Earthquake insurance cannot be purchased on its own — it must always be attached to a fire insurance policy. Only the earthquake insurance portion qualifies for the deduction, not the fire insurance premium, so check your certificate carefully for the correct amount.
- The resident tax earthquake insurance premium deduction is calculated as 1/2 of the premiums paid, so it ends up smaller than the income tax deduction (note that the cap is also lower: ¥25,000 for resident tax versus ¥50,000 for income tax).
- The former long-term casualty insurance premium deduction is a transitional measure that stopped accepting new contracts in 2006, so it only applies to long-standing contracts. Check whether your certificate states that the contract qualifies for the earthquake insurance premium deduction.
- The annual amount you pay for earthquake insurance can vary depending on whether you pay annually or monthly. Simply enter the "annual premiums paid" figure exactly as shown on your certificate.
Frequently asked questions
Side Note — How the earthquake insurance premium deduction came to be
The earthquake insurance premium deduction is a relatively new income deduction, first applied to income tax starting in the 2007 tax year. Before that, there was a "casualty insurance premium deduction" system that covered premiums for a wide range of casualty insurance contracts, including both fire and earthquake insurance, but this system was abolished in the 2006 tax reform.
The abolition is said to have been driven by a policy goal of encouraging more people to take out earthquake insurance. Interest in earthquake insurance rose sharply after the 1995 Great Hanshin-Awaji Earthquake, yet enrollment rates remained low at the time. By replacing the casualty insurance premium deduction with the earthquake insurance premium deduction, the tax system was reshaped to provide a stronger incentive to purchase earthquake coverage.
At the same time, it would have been harsh for policyholders under the old system to suddenly lose their deduction, so a transitional measure — the "former long-term casualty insurance premium deduction" — was created for long-term casualty insurance contracts signed on or before December 31, 2006. Since this transitional measure does not accept new contracts, the number of contracts it covers naturally shrinks year after year.