A Dependent Exemption is a tax benefit that allows taxpayers to reduce their taxable income for each qualifying dependent they claim. A dependent can be a child or a relative who meets specific criteria set by the IRS. This exemption helps lower the overall tax burden, making it easier for families to manage their finances. In the past, taxpayers could claim a specific dollar amount for each dependent, which directly reduced their taxable income. However, changes in tax laws, such as the Tax Cuts and Jobs Act of 2017, have suspended the dependent exemption through 2025, shifting focus to other tax credits like the Child Tax Credit.