The Tax Cuts and Jobs Act passed on December 22, 2017 made many changes to individual taxes beginning in 2018. One of those changes was the elimination of a deduction for personal exemptions and replacing it with a higher standard deduction.
The question becomes, if I don’t get a deduction for my dependents, is there any reason to list them on the return? The answer is: absolutely yes. Even though the deduction is gone, there are tax provisions that are tied to your dependents.
Starting in 2018, the child tax credit increased from $1,000 to $2,000 for each qualifying child (a child under the age of 17 by the end of the year). In addition, more taxpayers will qualify for the credit since the income phase out has increased to $400,000 for a joint return and $200,000 for others. In order to obtain the credit, you must include the name and taxpayer identification number of each qualifying child.
Also, new for 2018 is a dependent credit of up to $500 for each dependent who is not a qualifying child. An example of this is a qualifying relative who is not a qualifying child.
In addition, you will need to report your dependent child if you are in the process of adoption and want to claim the credit. The same is true for college tuition credits.
If you have child care expenses, you will need to indicate the name and taxpayer identification number of the qualifying child.
Your filing status as a qualifying widower or head of household will also require you to disclose your dependents.
As you can see, the deduction for dependents has been eliminated, but the need to report them still very much remains.