Q: Is it true that the new tax law has eliminated the dependent deduction for children? This seems like a big deal that is not getting a lot of attention.
A: It is true. It may be a bit of “inside baseball” but tax preparers have discussed this in great detail. Many taxpayers will owe more tax in 2018 and future years because they lose not just the exemption for their dependents but also the exemption for themselves.
The odd thing is that the dependent tests still exist in the law and may even apply in 2018 to save you taxes. The new law expanded the child tax credit and created a less valuable credit for other dependents.
So whether someone qualifies as a dependent can still be very important. One test for a qualifying relative other than a child is that their income be less than the personal exemption amount. This was $4,150 in 2017 but is zero in 2018.