An exemption, which reduces the taxable income, which is available to taxpayers for any eligible dependents. The amount of exemption is preset but varies from year to year.
An amount that the tax law allows to be deducted from an individual’s taxable income. A dependency exemption amount is allowed for each person the taxpayer can legally claim as a dependent.
Amount that taxpayers can claim for their eligible dependents. Each exemption reduces the income subject to tax. The exemption amount is a set amount that changes from year to year.