 |
Qualifying Relative and Exemption Amount
IRS issues notice with guidance
 Notice 2018-70 clarifies the definition of who is a "qualifying relative" for purposes of the new $500 credit for dependents and determining head of household filing status for years in which the exemption amount is zero – taxable years 2018-2025. You may recall that TCJA eliminated personal exemptions and this nonrefundable Credit for Other Dependents, has replaced it.
The notice explains that proposed regulations will provide that the reduction of the personal exemption amount to zero will not be taken into account for purposes of the $500 credit and head of household filing status. Instead, the exemption amount for the application of these provisions will be treated as $4,150, as adjusted for inflation, for years in which the exemption amount is zero.
The IRS intends to release proposed regulations which outline these changes. Until then, you can rely on the rules described above.
|
|
© 2018 KVLSM LLP – CERTIFIED PUBLIC ACCOUNTANTS AND ADVISORS – NEW YORK
This e-mail and any attachments are intended exclusively for the individual or entity to which it is addressed. It may be confidential or legally privileged. If you received this
message in error or are not the intended recipient, you should destroy the e-mail message and any attachments or copies, and you are prohibited from retaining,
distributing, disclosing or using any information contained herein. Please inform us of the erroneous delivery by return e-mail. Thank you for your cooperation.
|
