What Are Personal Exemptions? Understanding This Former Tax Break
By Tax&Facts | Published on | Read: 3 Mins
If you've been filing taxes for years, you might remember something called the personal exemption. But if you're newer to the tax world or started filing after 2018, you may have never heard of it at all. So, what were personal exemptions, and do they still matter today?
This article explains what personal exemptions were, why they no longer apply, and how their removal changed the way we file taxes.
What Was a Personal Exemption?
Before the Tax Cuts and Jobs Act (TCJA) took effect in 2018, the personal exemption was a fixed dollar amount you could subtract from your income for yourself, your spouse, and each dependent.
It worked similarly to the standard deduction in that it reduced your taxable income.
Example (Pre-2018):
If the personal exemption was $4,050 and you were a family of four, you could deduct $16,200
from your income — just from exemptions alone.
So, What Happened to Personal Exemptions?
Starting in 2018, the IRS eliminated personal exemptions as part of the TCJA. This change is in effect through at least 2025 unless new legislation reverses or modifies it.
To offset the removal:
- The standard deduction was nearly doubled
- Child Tax Credits were expanded
So while you lost one tax break, others were increased to keep the overall impact relatively neutral — especially for middle-income households.
Why Were They Removed?
The idea was to simplify the tax code. Having both a standard deduction and personal exemptions created overlap and confusion. By eliminating exemptions and expanding the standard deduction and credits, the system became easier to follow (in theory).
Will Personal Exemptions Ever Come Back?
Possibly. The current rules under the TCJA are set to expire after 2025. If Congress doesn’t act, personal exemptions could be reinstated in 2026, along with lower standard deductions.
Quick Recap
| Concept | Old Rule (Pre-2018) | Current Rule (2025) |
|---|---|---|
| Personal Exemption | $4,050 per person (in 2017) | Eliminated under current tax law |
| Standard Deduction | Lower (e.g., $6,350 for single in 2017) | Much higher (e.g., $14,000 for single in 2025 est.) |
FAQ Frequently Asked Questions (FAQ)
Q1: Do personal exemptions still exist in 2025?
A1: No. They were eliminated by the Tax Cuts and Jobs Act and are currently
not part of federal tax law through 2025.
Q2: Why were they removed?
A2: To simplify the tax system and make room for an expanded standard
deduction and larger tax credits.
Q3: Can I still claim dependents?
A3: Yes! While you can't claim a personal exemption for them, you can still
receive Child Tax Credits or Credit for Other Dependents if eligible.
Q4: Will personal exemptions return in 2026?
A4: They might. If Congress doesn’t extend the current tax rules, personal
exemptions could come back in 2026 under the old system.
Q5: Do states still allow personal exemptions?
A5: Some states still use personal exemptions for their state income tax,
even though the federal government does not.
Article History
v1.0 (May 19, 2025): Initial publication of the article
