Conduct the annual tax reconciliation from March to June; be sure to include all eligible special deductions

2. Conduct the annual tax reconciliation from March to June; be sure to include all eligible special deductions

Cost: No cost involved. The process can be completed in just a few minutes via the “Individual Income Tax” app.

In plain terms: The following groups of people typically receive a tax refund after completing this process: those who only worked for a few months throughout the year, those who changed jobs mid-year, or anyone who failed to claim deductions for child education, mortgage payments, rent, or elderly dependents. It takes only a few minutes to finish on a mobile device. If your total annual income falls below 120,000 yuan, or if the amount of tax you owe is under 400 yuan, you may skip this step.

Benefit: This process consolidates calculations for four types of income: wages and salaries, labor remuneration, author’s fees, and royalties. Any overpaid tax is refunded to you, while any underpaid amounts must be paid up. There are two scenarios where you may forgo this process: when your total annual income is under 120,000 yuan, or when the tax you owe is less than 400 yuan. These thresholds were set by the State Taxation Administration in 2023 and remain in effect through December 31, 2027. Conversely, the groups mentioned above are precisely those who usually qualify for a tax refund after completing the reconciliation.

Evidence grade: A

Sources: State Taxation Administration of China (2025). Administrative Measures for the Final Settlement and Settlement of Comprehensive Personal Income Tax (Article 6) and its Interpretation. <https://www.gov.cn/zhengce/202502/content_7006465.htm>; Ministry of Finance, State Administration of Taxation (2023). Announcement on the continuation of policies related to the final settlement and settlement of comprehensive personal income tax. <https://www.gov.cn/zhengce/zhengceku/202308/content_6900594.htm>

Notes: Even individuals who owe tax must complete this process; failure to do so is illegal. There are seven categories of special deductions available: child education, continuing education, major illness medical expenses, mortgage interest payments, rent payments, elderly dependents support, and childcare expenses for children under three. Note that you may claim either mortgage interest or rent deductions, but not both.