Lesson Summary

There are two types of exemptions:

• personal exemptions—for the taxpayer and spouse
• dependency exemptions—for dependents

Each exemption reduces the income that is subject to tax by the exemption amount

• The deduction for personal exemptions is suspended (reduced to 0) for tax years 2018 through 2025 by the Tax Cuts and Jobs Act. Although the exemption amount is zero, the ability to claim an exemption may make taxpayers eligible for other tax benefits.