Municipal subsidies for babysitter use are now tax-free! Tax terrible problem finally solved
A government policy has been put in place to exempt from income tax the subsidies from the municipality that you receive when you use a babysitter!
This will make it easier to use babysitters for children on waiting lists or in temporary care.
The tax terrible problem of Tokyo babysitter subsidy
The Tokyo Metropolitan Government has started a babysitting support program in FY2018.
Until a child on waiting list is admitted to a nursery school, the user can use a babysitter at the cost of 150 yen per hour, since the user can receive a subsidy.
What a great system for families with children! But there was a trap.
In the case of a babysitter who charges 2,400 yen per hour, the difference of 2,250 yen between the 2,400 yen and 150 yen paid by the user is subsidized, but this is treated as “miscellaneous income” under the income tax law, which is a terrible trap.
In other words, “You can ask for a babysitter cheaply! If you use it to the fullest, you will end up with a “terrible tax ” on your tax return the following year.
This is the so-called “tax terrible problem” that went up in flames on SNS.
For example, if a family with an annual income of 4 million yen received a subsidy of 3 million yen using this program, they would be taxed about 400,000 yen more the following year.
Struggling to solve the tax terrible problem
We can’t overlook this messed up system! So we got up and went around to the National Diet and Tokyo Assembly members.
In the meantime, this year, the spread of COVID-19 has begun.
In Tokyo, if children were forced to use a babysitter due to the effects of COVID-19, they were able to receive a subsidy for the same reason.
With the growing need for babysitters due to COVID-19, I was determined to make the babysitter subsidies tax-free at all costs, so on April 14 of this year, I went with Councilor Toshiko Takeya and members of the Tokyo Metropolitan Assembly’s KOMEITO Party to request that the subsidy for babysitters be exempted from taxation from the Vice Minister (then) Toyama of the Ministry of Finance, who is the head of taxation. As a result, we were able to get a tax-free babysitting subsidy to deal with COVID-19.
As a result, we were able to get a tax-free babysitting subsidy to deal with nursery and school closures due to COVID-19 as I wrote in a previous article.
However, as to whether or not the normal subsidy for babysitters for children on a waiting list should also be exempted from taxation, former Vice Minister Toyama replied that “a mid- to long-term study is needed,” so we felt that it might take a little more time to achieve this.
However, we did not give up and asked for the tax exemption at the hearing of the Komeito Health and Labor Committee in November this year.
And now, the next fiscal year, the government’s policy of exempting them from taxation has been announced already
I would like to thank everyone at the Ministry of Finance led by former Vice Minister Toyama who listened to our request sincerely, the members of the Diet of the KOMEITO including Ms. Toshiko Takeya, and the members of the Tokyo Metropolitan Assembly including Mr. Matsuba.
Thank you so much!
Municipalities, please enhance babysitting subsidies
This will reduce the household’s financial burden when using a babysitter and make it easier to use a babysitter.
Municipalities, please enhance the babysitter subsidies from now on, because the tax terrible problem will go away!
For the smiles of a parenting family, thank you!