Before we outline what’s changed with dependent and personal exemptions due to tax reform, let’s review the prior rules. Before the Tax Cuts and Jobs Act (TCJA), taxpayers could claim an exemption for themselves, their spouse, and their dependents (if eligible). Each exemption lowered taxable income by $4,050 under pre-TCJA (2017) law.
The TCJA has suspended all personal and dependent exemptions for tax years 2018-2025. New tax provisions, including a higher standard deduction, may or may not make up for the removal of personal and dependent exemptions, as taxpayers’ situations vary.