Suspension of Personal/Dependency Exemptions For 2018 to 2025
The personal and dependency exemptions have been suspended for 2018 to 2025. Technically, for those years the exemption amount is zero.
What Is It?
Exemptions in General
Exemptions are set amounts that you subtract from your adjusted gross income (AGI) to calculate taxable income. For 2017, you can deduct $4,050 (the same as in 2016) for each exemption you claim. There are two types of exemptions: personal exemptions, which you claim for yourself and your spouse, and dependency exemptions. While the amount you can deduct is the same for each type of exemption, the rules that apply to each type are different.
Phaseout of Exemptions
If your adjusted gross income (AGI) is high, you may lose part of your exemptions. The amount of adjusted gross income at which exemptions begin to get phased out depends on your filing status. Figures for 2017 are as follows:
AGI Phaseout Threshold Amount
Married filing jointly
Head of household
Married filing separately
You have to reduce the dollar amount of your exemptions by 2 percent for each $2,500 or part of $2,500 ($1,250 if your filing status is married filing separately) that your AGI exceeds the amount shown for your filing status. If your AGI is near the phaseout amount, you should attempt to lower your AGI in years when you can claim a larger number of exemptions.
Caution: For alternative minimum tax (AMT) purposes, you may not claim any personal or dependency exemptions.
Your Own Personal Exemption
You can claim one exemption for yourself, unless you can be claimed as a dependent by another taxpayer.
Tip: If you're married and file a joint return, you can take your own exemption. If you're married and file as married filing separately, you can take your own exemption only if another taxpayer is not entitled to claim you as a dependent.
Exemption for a Spouse
If you are married and file a joint return, you can claim an exemption for your spouse. If your spouse died during the year, you may still claim an exemption for your spouse if you didn't remarry during the year. If you file as married filing separately, you can claim an exemption for your spouse only if your spouse had no gross income at all and cannot be claimed as a dependent by another taxpayer.
You are generally allowed one exemption for each person you can claim as a dependent. To claim a dependency exemption, you must first have a "qualifying child" or a "qualifying relative." Then, you must meet three tests, described below. For more information on the dependency exemption, see IRS Publication 501, Exemptions, Standard Deduction, and Filing Information.
Tip: You can claim an exemption for a dependent even if your dependent files his or her own return. However, the dependent cannot also claim an exemption on his or her tax return.
Definition of Qualifying Child
There are five tests that must be met for a child to be considered your "qualifying child" for purposes of the dependency exemption, although in most cases, only the first four are relevant. The tests are the: (1) relationship test, (2) age test, (3) residency test, (4) support test, and (5) special test for qualifying child of more than one person.
(1) Relationship Test
To meet this test, a child must be:
- Your son, daughter, stepchild, adopted child or eligible foster child, or a descendant of any of them (e.g., your grandchild), or
- Your brother, sister, half-brother, half-sister, stepbrother, stepsister, or a descendant of any of them (e.g., your niece or nephew).
(2) Age Test
To meet this test, a child must be:
- Under age 19 at the end of the year,
- A full-time student under age 24 at the end of the year, or
- Permanently and totally disabled at any time during the year, regardless of age
(3) Residency Test
To meet this test, a child must have lived with you for more than half the year. Your child is considered to have lived with you even during periods when one or both of you are temporarily absent due to illness, education, business, vacation, or military service.
Tip: For a child of divorced or separated parents, the custodial parent (the one with whom the child lived for the greater part of the year) is typically the one who claims the dependency exemption. However, the child will be treated as the qualifying child of the noncustodial parent if all of the following apply: (a) the parents are divorced, separated under a written separation agreement, or lived apart during the last six months of the year; (b) the child received over half of his or her support for the year from the parents; (c) the child is in the custody of one or both parents for more than half the year; and (d) the custodial parent signs a written declaration that he or she will not claim the child as a dependent for the year (IRS Form 8332 can be used for this purpose), or a qualified pre-1985 instrument between the parents provides that the noncustodial parent can claim the child as a dependent (the noncustodial parent must also have provided at least $600 for the support of the child during the year).
(4) Support Test
The child cannot have provided more than half of his or her own support for the year.
Tip: For full-time students, any college scholarship money doesn't count in this determination.
(5) Special Test for Qualifying Child of More Than One Person
In some cases, a child meets the relationship, age, residency, and support tests to be a qualifying child for more than one person. If this happens, only one person can actually treat the child as a qualifying child. If you and another person have the same qualifying child, you can agree which of you will treat the child as a qualifying child for purposes of the dependency exemption. If you can't agree, the IRS will use a special "tie-breaker" test to determine which person can treat the child as his or her qualifying child (for more information on the test, see IRS Publication 501).
Definition of Qualifying Relative
Even if you don't have a qualifying child, you may be able to claim a dependency exemption if you have a qualifying relative. There are four tests that must be met for a person to be considered your "qualifying relative": (1) not a qualifying child test, (2) member of household or relationship test, (3) gross income test, and (4) support test. Unlike a qualifying child, a qualifying relative can be any age.
(1) Not a Qualifying Child Test
A child can't be your qualifying relative if the child is your qualifying child or the qualifying child of anyone else.
(2) Member of Household or Relationship Test
To meet this test, a person must either:
- Live with you for the entire year as a member or your household. This requirement is still met if one or both of you are temporarily absent due to illness, education, business, vacation, or military service.
- Be related to you, for example a child, adopted child, stepchild, grandchild, brother, sister, half-brother, half-sister, stepbrother, stepsister, mother, father, stepparent, grandparent, aunt, uncle, niece, nephew, son-in-law, or daughter-in-law (any of these relationships that were established by marriage don't end by death or divorce). As long as the person is related to you, he or she doesn't have to live with you all year to meet this test.
(3) Gross Income Test
To meet this test, a person's gross income for the year must be less than $4,050 (figure for 2016 and 2017).
(4) Support Test
To meet this test, you must generally provide more than half of a person's total support during the year. You can do this by comparing the amount you contributed with the entire amount of support the person received from all sources (this includes support the person provided from his or her own funds). Total support includes amounts spent to provide food, lodging, clothing, education, medical and dental care, recreation, transportation, and similar necessities.
Example(s): You provide $4,000 toward your mother's support during the year. She has earned income of $600, nontaxable Social Security benefits of $4,800, and tax-exempt interest of $200. She uses all of this money ($5,600) for her support. You can't claim an exemption for your mother because the $4,000 you provide is less than half of her total support of $9,600.
Tip: In cases where two or more individuals together provide more than half of a person's total support, but no single individual provides more than half of a person's total support, the parties can agree that any individual who provides more than 10 percent of the person's support can claim an exemption for that person as a qualifying relative. Each of the others must sign a statement agreeing not to claim the exemption for that year, and Form 2120, Multiple Support Declaration, identifying each of the others who agreed not to claim the exemption (or a similar declaration), must be attached to the tax return of the person claiming the exemption.
Example(s): You, your sister, and your two brothers provide the entire support for your mother for the year. You provide 45 percent, your sister 35 percent, and your two brothers each provide 10 percent. Either you or your sister can claim an exemption for your mother. The other person must sign a statement agreeing not to take an exemption for your mother. The one who claims the exemption must attach Form 2120, or a similar declaration. Because neither brother provides more than 10 percent of the total support, neither is eligible to take the exemption and neither has to sign a statement.
Tip: In most cases, a child of divorced of separated parents will be a qualifying child of one of the parents. But if the child doesn't meet the requirements to be a qualifying child of either parent, the child may be a qualifying relative of one of the parents, which is most often the custodial parent. For a child to be treated as the qualifying relative of the noncustodial parent, the parent must meet the same conditions set forth above for the residency test in the Definition of Qualifying Child section.
Three Tests That a Qualifying Child or Qualifying Relative Must Meet
If you have a qualifying child or qualifying relative, then you must meet three tests in order to take the dependency exemption: (1) dependent taxpayer test, (2) joint return test, and (3) citizen or resident test.
(1) Dependent Taxpayer Test
If another person could claim you as a dependent, then you can't claim anyone else as a dependent. This is true even if you have a qualifying child or qualifying relative. Similarly, if you are filing a joint return and your spouse could be claimed as a dependent by someone else, then you and your spouse can't claim any dependents on your joint return.
(2) Joint Return Test
You can't claim an exemption for a dependent who files a joint return.
Example(s): You support your daughter for the entire year while her husband is in the armed forces. The couple files a joint return. Even if your daughter is a qualifying child, you can't claim an exemption for her.
(3) Citizen or Resident Test
The dependent must be a U.S. citizen, U.S. resident, or U.S. national, or must be a resident of Canada or Mexico for some part of the year.
Tip: For adopted children who are not U.S. citizens, U.S. residents, or U.S. nationals, the child will meet this test if you are a U.S. citizen and the child lived with you as a member of your household for the entire year.
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