Key Takeaways
- The $4,050 personal exemption was suspended in 2018 and permanently eliminated by the One Big Beautiful Bill Act - it is not coming back.
- The 2026 standard deduction is $16,100 (single), $32,200 (married filing jointly), and $24,150 (head of household), now permanently inflation-indexed.
- The Child Tax Credit is $2,200 per qualifying child for 2026, and non-CTC dependents qualify for a $500 credit.
- Filers 65+ get a new $6,000 per-person bonus deduction (through 2028), phasing out above $75,000 single / $150,000 joint income.
- Large families with many older dependents were the main losers in the trade; most other households come out ahead under the current structure.
Quick answer for anyone searching: the personal exemption is permanently gone. The $4,050-per-person deduction last existed on 2017 returns, was suspended by the Tax Cuts and Jobs Act (TCJA) from 2018 through 2025, and Trump’s One Big Beautiful Bill Act (OBBBA) made the elimination permanent in 2025. It’s not coming back.
I originally wrote this post when the exemption disappeared and families were bracing for higher tax bills. Eight years on, it’s worth a fresh look at what actually replaced it — because for most households, the replacement math works out better than people feared, though not for everyone.
What the Personal Exemption Was
Through 2017, you could deduct $4,050 from taxable income for yourself, your spouse, and each dependent. A married couple with three kids knocked $20,250 off their taxable income before anything else. Large families loved it; the exemption scaled with household size in a way the standard deduction doesn’t.
What Replaced It
A near-doubled standard deduction, now permanent. For 2026, it’s $16,100 single, $32,200 married filing jointly, and $24,150 head of household, per the IRS’s 2026 inflation adjustments. OBBBA locked these levels in with annual inflation indexing — the scheduled 2026 “snap-back” to the old system never happened.
A bigger Child Tax Credit. The CTC doubled to $2,000 per child under TCJA and OBBBA pushed it to $2,200 per qualifying child for 2026, inflation-indexed going forward. Credits beat deductions dollar-for-dollar — a $2,200 credit cuts your tax bill by $2,200, while a $4,050 exemption in the 22% bracket only saved about $891 per person. Full details in my Child Tax Credit guide.
A $500 credit for other dependents. College-age kids, elderly parents you support, and other non-CTC dependents get the “Credit for Other Dependents” — a partial answer to losing their exemptions.
For seniors: a new bonus deduction. OBBBA added a $6,000 per-person deduction for filers 65+ (2025–2028), on top of the regular extra standard deduction for age. It phases out above $75,000 of income ($150,000 joint). If that’s you, this is worth more than the old exemption ever was.
Who Won and Who Lost
Winners: most single filers and married couples with 0–2 kids, seniors under the income phase-out, and anyone who used to itemize small amounts — the big standard deduction simplified their filing and cut their bill.
Losers: large families with several dependents over the CTC age limits, and some households supporting multiple adult dependents — the $500 other-dependent credit doesn’t fully replace a $4,050 exemption per person for higher-bracket filers.
Sarah’s example: Sarah and her husband have four kids, two under 17. Old system (inflated to today): ~$24,300 in exemptions plus a much smaller standard deduction and a $1,000/child CTC. In 2026: $32,200 standard deduction + $4,400 in CTC for the younger two + $1,000 in other-dependent credits for the older two. Despite losing six exemptions, their total federal tax is lower under the current system — the doubled standard deduction and doubled-plus credit do the heavy lifting.
Note that exemptions still exist in a few corners: several states still allow personal exemptions on state returns even though the federal one is gone, so don’t be confused when your state form asks about them.
Looking Ahead: 2027
Because OBBBA made the current structure permanent, 2027 brings inflation adjustments rather than structural change — expect the standard deduction, CTC, and bracket thresholds to tick up in the usual October/November IRS announcement. The senior $6,000 deduction is currently scheduled to run through 2028, so watch whether Congress extends it as that sunset approaches.
The practical takeaway for planning: with roughly 9 in 10 filers now taking the standard deduction, the levers that matter are the credits — CTC, EITC, education credits — and pre-tax savings like your 401(k) and IRA contributions, which reduce taxable income the way exemptions used to. I’ll update the figures here when the IRS publishes 2027 numbers.
Common Issues to Watch Out For
- Waiting for the exemption to come back. It won’t — OBBBA made the elimination permanent. Plan around the current structure.
- Confusing federal and state rules. Several states still have personal exemptions on state returns; check your state’s form rather than assuming it matches federal.
- Missing the $500 other-dependent credit. Adult dependents (college kids, supported parents) don’t get the CTC but do qualify for this — it’s commonly overlooked.
- Seniors missing the new $6,000 deduction. It’s new since 2025, per-person, and phases out above $75k/$150k income — check eligibility before filing.
- Assuming you should still itemize. With the standard deduction this large, itemizing only pays if your deductions clear $16,100/$32,200 — most filers no longer come close.
