Self-Medication or Medical Expense Deduction: Which Wins

The short answer: how the two deductions differ

Sources: NTA Tax Answer No.1129 "When you have paid for specified non-prescription drugs (the Self-Medication Tax System)"[NTA], No.1120 "When you have paid medical costs (the medical expense deduction)"[NTA]

The NTA states plainly that "once you have chosen to apply one of these, you cannot change that choice by a request for correction or an amended return." There is no going back if you file and only then realise the other one would have been better, so work out both before you file.

Quick reference: which is better for your mix of medical costs and OTC medicines

The larger deduction wins (the tax you get back is the deduction multiplied by your income tax rate, plus 10% of it in resident tax). Eligible OTC medicines are included in the total medical costs as well.

The rule boils down to two lines.

1. If total medical costs exceed 188,000 yen, take the medical expense deduction. The medical expense deduction (total − 100,000 yen) is bound to beat the Self-Medication cap of 88,000 yen.
2. At 188,000 yen or less, compare "eligible OTC − 12,000 yen" with "total medical costs − 100,000 yen". The amounts subtracted differ by 88,000 yen, so if eligible OTC medicines account for 88,000 yen or more of your total, take the Self-Medication Tax System; otherwise take the medical expense deduction. If your total medical costs are 100,000 yen or less, the medical expense deduction is zero, so anything over 12,000 yen of OTC medicine makes Self-Medication the only choice.

How to spot eligible OTC medicines, and the "qualifying health measure"

• The mark on the receipt. Eligible products carry a mark such as a star or the words "eligible for the Self-Medication Tax System" on the receipt, with a subtotal of the eligible amount. The packaging also carries a common identification mark. The MHLW updates the list of eligible products (split into switch OTC and non-switch OTC) once a month[MHLW].
• What is eligible. Switch OTC drugs converted from prescription medicines (Loxonin, Gaster, Allegra and the like), and non-switch OTC drugs with certain effects (cold remedies, antipyretic analgesics, rhinitis medicines, stomach remedies and so on). The 2026 review added digestive medicines and some Chinese herbal medicines, while roughly 50 products with weaker evidence were dropped.
• What is not eligible. Vitamin preparations and energy drinks (quasi-drugs), most eye drops, sticking plasters and masks, supplements, and prescription medicines. Prescription medicines count for the medical expense deduction instead.
• The qualifying health measure. The person filing must have had, during that year, one of the following: a workplace periodic health check-up, a municipal health check or cancer screening, a specific health check-up, or a vaccination such as influenza. Even where you add in OTC medicines bought by family members, it is enough that the person filing took the measure. Keep the result notice or receipt for five years (it need not be attached).

The 2026 tax reform: switch OTC drugs made permanent

The Self-Medication Tax System began in 2017 as a five-year temporary measure, was extended by five years from 2022, and had been set to end on 31 December 2026. The fiscal 2026 tax reform removed the expiry date for switch OTC drugs, while the non-switch OTC part was extended by five years[MHLW]. It is no longer "a system that ends in 2026", so it is worth keeping an eye on what you spend on OTC medicines each year.

The 88,000 yen cap on the deduction is unchanged. Few households spend 100,000 yen or more a year on OTC medicines, and most people who use the system end up with a deduction of 10,000 to 30,000 yen and a refund of a few thousand yen. Even so, filing is no more work than for the medical expense deduction, and with e-Tax it is simply a matter of entering amounts in the statement, so do use it in the years you qualify.

How to file, and what to watch for

1. Gather a year's receipts and add up the eligible amount. You only need to add up the subtotals on the receipts. Family members' purchases can be included.
2. Work out the medical expense deduction too, and compare. Use the quick reference table above. You do not need to prepare both statements; you file only the one that is better for you.
3. Attach the "Self-Medication Tax System statement" to your tax return. In the online return preparation service, choose "Self-Medication Tax System" from the medical expense deduction screen and enter the pharmacy names, amounts and the type of health measure. Documents proving the health measure need not be attached, but keep them for five years.
4. It cannot be claimed through year-end adjustment. Company employees also have to file a return (a refund claim), which can be made from January of the following year for five years. The same applies to earlier years.

Filing a tax return invalidates the one-stop special provision for hometown tax donations. If you made such donations, remember to enter the one-stop portion on your return as well. For what the medical expense deduction covers and how it is calculated, see how to calculate the medical expense deduction; for how refunds under the high-cost medical benefit are treated, see high-cost medical benefits.

Frequently asked questions

Summary

• If eligible over-the-counter drug purchases reach ¥12,000 or more a year, use the self-medication tax system; if medical expenses exceed ¥100,000 a year, use the medical expense deduction. You cannot use both.
• If total medical expenses exceed ¥188,000, the medical expense deduction is always better. Below that, which one wins depends on how much of the spending is on OTC drugs.
• Once you choose and file, you cannot switch even through a request for reassessment or an amended return. Calculate both before filing.
• A requirement for self-medication relief is that you personally had a health checkup, vaccination, or similar in that year. It cannot be claimed through year-end adjustment — you must file a tax return.
• Under the Reiwa 8 tax reform, the deadline for designated switch-OTC drugs has been abolished; the ¥88,000 deduction cap remains unchanged.

Reference links (sources)

This article is based on the materials below. The list of eligible products is updated every month, so check the MHLW page for the latest version.

• NTA Tax Answer No.1129, When you have paid for specified non-prescription drugs (the Self-Medication Tax System) (the deduction, the qualifying health measure, no change after choosing)
• NTA Tax Answer No.1120, When you have paid medical costs (the medical expense deduction)
• MHLW, About the Self-Medication Tax System (the fiscal 2026 tax reform, the list of eligible products, the identification mark)

Note: this article is general information. The amount you get back varies with your income tax rate. For an individual decision, check with your tax office.