What Tax Exemptions Can I Claim: Deductions, Dependents, and Credits

The federal personal exemption is gone and staying gone: Congress set it to zero starting in 2018, and the One, Big, Beautiful Bill Act made that permanent. What replaced it is the practical answer to the question of tax exemptions for dependents in 2026: a much larger standard deduction that shields a fixed chunk of your income, plus a set of credits that pay out per dependent. Credits cut your tax bill dollar for dollar, which is usually better than the old exemption ever was.¹

The Standard Deduction Does the Work the Exemption Used To

For the 2026 tax year, the standard deduction is $16,100 for single filers and married taxpayers filing separately, $32,200 for married couples filing jointly and surviving spouses, and $24,150 for head of household.² That amount comes off your income before any tax is calculated. A single filer earning $50,000 has only $33,900 exposed to federal tax before credits enter the picture.

You don’t get an added exemption on top of that for each dependent the way you did before 2018. What claiming a dependent does now is unlock credits, and in some cases a better filing status. Both are worth more than the old exemption in most situations.

Who Counts as a Dependent

The tax code recognizes two kinds of dependents, and which one applies decides which credits you can claim.³

Qualifying Child

A qualifying child has to meet every one of these tests:

Relationship: your son, daughter, stepchild, foster child, sibling, step-sibling, or a descendant of any of those (grandchild, niece, nephew).
Age: under 19 at year-end, or under 24 if a full-time student. No age limit for a child who is permanently and totally disabled.
Residency: lived with you more than half the year. School, medical care, and military service count as temporary absences, not moves.
Support: the child did not provide more than half of their own support.
Joint return: the child did not file jointly with a spouse, except solely to claim a refund.

The child also has to be younger than you (or your spouse, if you file jointly).

Qualifying Relative

Someone who doesn’t fit the qualifying-child rules can still be your dependent as a qualifying relative if:⁴

Their gross income for 2026 is less than $5,300.⁵
You provide more than half of their total support for the year.
They’re related to you in a way the code recognizes (parent, sibling, in-law, aunt, uncle, and others), or they lived with you as a member of your household all year.
They aren’t the qualifying child of any taxpayer.

There is no age limit for a qualifying relative. An elderly parent living on Social Security whom you support financially is the common example. Social Security income generally doesn’t count toward the $5,300 gross income test, but other income the parent receives, such as a pension or interest, usually does.

When Two People Try to Claim the Same Child

The IRS applies tie-breaker rules in order: a parent beats a non-parent; if both claimants are parents who aren’t filing jointly, the one the child lived with longer wins; if that’s equal, the parent with the higher adjusted gross income wins; and a non-parent can claim only if no parent does and the non-parent’s income exceeds any eligible parent’s.⁶ Duplicate Social Security numbers get flagged automatically, and the second return filed is rejected. If you’re separated or divorced, coordinate before filing season rather than sorting it out through amended returns.

What Each Dependent Is Actually Worth

Child Tax Credit

For 2026, the Child Tax Credit is up to $2,200 per qualifying child under 17. It starts to phase out at $200,000 of adjusted gross income for single filers and $400,000 for married joint filers, dropping $50 for every $1,000 of income above those thresholds.⁷

Up to $1,700 per child is refundable as the Additional Child Tax Credit, meaning it can come back to you as a refund even if you owe no tax. The refundable portion isn’t automatic; it’s calculated from earned income above $2,500, so families with very low earnings may not get the full amount. Starting in 2026, the credit is indexed to inflation.

Credit for Other Dependents

Dependents who don’t qualify for the Child Tax Credit, usually because they’re 17 or older, can still be worth a $500 nonrefundable credit each. Teenagers aged 17 and 18, college-age dependents through 23, and qualifying relatives like a supported parent all fit here. The same $200,000 and $400,000 phaseout thresholds apply. Because the credit isn’t refundable, it can zero out your tax but won’t produce a refund on its own.⁷

Earned Income Tax Credit

The EITC is fully refundable and scales with the number of qualifying children. For 2026 the maximum amounts are $664 with no children, $4,427 with one child, $7,316 with two, and $8,231 with three or more. Eligibility ends at $62,974 of AGI for a single filer with three children and at $70,224 for a married couple filing jointly at the same family size. You need earned income to claim it, and investment income is capped at $12,200 for 2026. For lower- and moderate-income families, this is often the single biggest line on the refund.

Head of Household Filing Status

Claiming a dependent can also change your filing status if you’re unmarried. If you pay more than half the cost of keeping up a home for a qualifying child or dependent relative, you can file as head of household. Your standard deduction rises from $16,100 to $24,150, and the tax brackets widen, so more of your income is taxed at lower rates.²

The qualifying person usually has to live with you for more than half the year. A dependent parent is the exception: they don’t have to live with you as long as you pay more than half the cost of their separate household, including a nursing home.⁸ Costs that count toward maintaining the home include rent or mortgage, property taxes, insurance, utilities, food eaten in the home, and repairs.

Documentation the IRS Expects

Every dependent needs a valid Social Security number on your Form 1040. If the number doesn’t match IRS records, the claim is denied automatically.⁹ For a dependent who isn’t eligible for an SSN, you apply for an Individual Taxpayer Identification Number using Form W-7 filed with the return.¹⁰

For a qualifying relative, keep records that show you paid more than half of the person’s total support. The IRS counts food, housing at fair rental value, clothing, education, medical and dental care, recreation, and transportation as support.⁴ Receipts, bank statements, and canceled checks organized by category are enough if you’re ever asked to prove it.

What Happens If You Claim a Dependent You Shouldn’t

If the IRS finds during an audit that you improperly claimed the Child Tax Credit, EITC, or Credit for Other Dependents due to reckless disregard of the rules, you face a two-year ban on claiming those credits. For a fraudulent claim, the ban is ten years.¹¹ A two-year EITC ban alone can cost a family with three children more than $16,000 in lost credits, and the ban applies even in years when you would otherwise have a legitimate claim. Paid preparers face a due-diligence penalty of $500 or more per failure on these credits, which is why a careful preparer asks for documentation instead of taking your word for it.¹²

A Note on State Taxes

Many states still offer their own per-dependent exemption or credit even though the federal exemption is zero. Structures vary: some states give a flat deduction per dependent, some give a credit against state tax, and a handful have no income tax at all. Most states that offer a dependent benefit use the federal definition, so a dependent who qualifies federally usually qualifies for state purposes too. Check your state’s Form 1040 equivalent for the current amounts, because the real-world value depends on your state’s tax rate.

Beyond Dependents: Income the Federal Code Doesn’t Tax

Some money never appears as taxable income in the first place, and it’s worth knowing what falls outside the tax base so you don’t overreport. Life insurance proceeds paid because of the insured’s death are generally excluded from the beneficiary’s gross income, though interest on proceeds left with the insurer is taxable.¹³ Gifts and inheritances themselves aren’t income to the recipient, although any income the property later generates is.¹⁴ Interest on state and local bonds is excluded from federal income tax, though you still report it as tax-exempt interest.¹⁵ Workers’ compensation for a job-related injury or illness is fully exempt, but retirement benefits calculated on age or years of service are not.¹⁶ Scholarship money used for tuition, fees, books, and required supplies at an eligible school is tax-free; amounts for room and board or received as pay for teaching or research are not.¹⁷ Need-based public assistance, SSI, Medicare benefits, disaster relief grants, and federal housing assistance are all excluded from gross income.

None of these are exemptions you claim in the sense the pre-2018 personal exemption was. They’re categories of income the code simply doesn’t reach, and knowing they exist keeps you from paying tax on money that was never taxable to begin with.

1
Legal Information Institute. 26 USC 151(d)(5)(A) – Definition: Exemption Amount
2
Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
3
Office of the Law Revision Counsel. 26 USC 152 – Dependent Defined
4
Internal Revenue Service. Publication 501, Dependents, Standard Deduction, and Filing Information
5
Internal Revenue Service. Rev. Proc. 2025-32
6
IRS. Tie-Breaker Rules
7
Internal Revenue Service. Child Tax Credit
8
Internal Revenue Service. Head of Household Filing Status
9
Internal Revenue Service. Dependents 9
10
Internal Revenue Service. How to Apply for an ITIN
11
Taxpayer Advocate Service. Erroneously Claiming Certain Refundable Tax Credits Could Lead to Being Banned From Claiming the Credits
12
Office of the Law Revision Counsel. 26 USC 6695 – Other Assessable Penalties With Respect to the Preparation of Tax Returns for Other Persons
13
Office of the Law Revision Counsel. 26 USC 101 – Certain Death Benefits
14
Office of the Law Revision Counsel. 26 USC 102 – Gifts and Inheritances
15
Office of the Law Revision Counsel. 26 USC 103 – Interest on State and Local Bonds
16
Internal Revenue Service. Publication 525, Taxable and Nontaxable Income
17
Office of the Law Revision Counsel. 26 USC 117 – Qualified Scholarships