Taxing Definitions

Definition — The domino doctrine

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In complicated systems, making a single change can result in other, unintended changes. That happened with the Tax Cuts and Jobs Act due to the suspension of the deduction for the personal exemption.

While the personal exemption itself was not repealed, the tax law reduced the deduction to zero. Prior to the change, the exemption amount for 2018 would have been $4,150.

The unintended changes were triggered because other parts of the US federal income tax code reference the personal exemption, and reducing the exemption to zero effectively eliminated the benefit of those provisions.

For example, section 152 of the internal revenue code generally allows the term “dependent” to include a “qualifying relative.” Part of the definition of a “qualifying relative” is an individual whose gross income is less than the exemption amount. Under that definition, an exemption amount of zero would mean the individual would have to have negative gross income.

In addition, the new $500 federal income tax credit for certain dependents can also apply to qualifying relatives, as can the filing status of “head of household.” In both cases, an exemption amount of zero eliminates the ability to claim a qualifying relative.

For tax years 2018-2025, the IRS says the reduction of the personal exemption will not be taken into account for purposes of determining whether an individual is a qualifying relative (see notice 2018-70).


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Because the suspension of the deduction for the personal exemption expires at the end of 2025.

$4,150, the calculated amount of the 2018 personal exemption before the Tax Cuts and Jobs Act. The amount for 2019 is $4,200.