(UNITED STATES) The federal tax break once known as “personal exemptions” is no longer available, and lawmakers have moved to make that change permanent. Beginning in 2018, the Tax Cuts and Jobs Act removed the deduction for personal exemptions, ending a core feature many households relied on to lower taxable income. As of October 2025, taxpayers still cannot claim personal exemptions for themselves, a spouse, or dependents.
Recent legislation passed in 2025 seeks to extend key Tax Cuts and Jobs Act provisions beyond their original sunset and would permanently repeal personal exemptions to prevent tax increases at the end of 2025. Supporters say the larger standard deduction and a stronger Child Tax Credit were designed to replace the old structure, aiming for simpler returns and steadier tax bills across income groups.
How the change affects immigrant families and day-to-day choices
For immigrant families, the shift touches everyday choices: how employers withhold tax from paychecks, what number appears on a dependent’s tax return, and how tax records support immigration filings. The standard deduction nearly doubled under the TCJA, raising the income threshold before tax applies. But losing personal exemptions has changed the math for many households, including:
- Mixed-status families
- Students on temporary visas
- Workers with tax residency changes during the year
According to analysis by VisaVerge.com, the trade-off between personal exemptions and a larger standard deduction has uneven results depending on family size, filing status, and eligibility for child and dependent credits.
Policy changes overview
- Under the Tax Cuts and Jobs Act, the deduction for personal exemptions was removed for tax years 2018 through 2025.
- Before 2018, taxpayers could claim a set amount for themselves and each qualified dependent, reducing adjusted gross income.
- In place of those personal exemptions, the law:
- Raised the standard deduction across filing statuses.
- Expanded the Child Tax Credit, including a higher income phaseout and a partially refundable amount.
- In 2025, lawmakers advanced measures to extend many of these rules beyond 2025 while permanently repealing personal exemptions, aiming to avoid sudden tax increases when temporary parts of the law would otherwise expire.
Arguments for and against the repeal
Supporters:
– Argue the package simplifies returns by replacing multiple items (standard deduction + exemptions + dependency tests) with a single, larger standard deduction.
– Point to a higher Child Tax Credit as offsetting the loss for families with children.
– Cite the Joint Committee on Taxation and other analysts who call it a streamlined approach.
Critics:
– Note that larger families — including many immigrant households with multiple dependents — may have received more relief under the old system.
– Highlight that households ineligible for the full Child Tax Credit can be worse off.
The standard deduction as the anchor
The law set a much higher base deduction, which is indexed for inflation. That means more income is shielded from tax before itemized deductions apply.
- For many middle-income families, the shift keeps overall tax bills steady compared with the prior mix.
- For others, losing exemptions leads to higher taxable income even after the larger standard deduction is applied.
The exact outcome depends on:
– Household size
– Income
– Eligibility for child and dependent credits
– Whether the taxpayer itemizes deductions (mortgage interest, SALT subject to cap, charitable gifts)
Effects on residency-based rules and withholding
For nonresident aliens and recent arrivals who become resident aliens for tax purposes mid-year, the removal of personal exemptions alters earlier strategies that relied on claiming exemptions for a spouse or dependent under limited rules.
This affects practical steps like:
– Paycheck withholding on Form W-4
– Residency-based filing on Form 1040 or Form 1040-NR
Employers and foreign national workers often need extra care when a worker’s tax residency changes mid-year due to:
– The substantial presence test
– Marriage to a U.S. citizen or resident
Tax returns and immigration paperwork
Tax returns support immigration filings such as the Form I-864 Affidavit of Support. Sponsors must show income at or above federal poverty guidelines and often submit recent tax returns as proof.
- The absence of personal exemptions does not change household size for immigration purposes.
- It can change the layout of a tax return and how dependents appear.
- Sponsors and joint sponsors should ensure their tax returns, W-2s, and pay statements tell a consistent story alongside their Affidavit of Support.
Key dates and possible future changes
- TCJA removed personal exemptions starting January 1, 2018.
- Several TCJA changes were set to expire December 31, 2025.
- In 2025, Congress moved to extend much of the law and to permanently repeal personal exemptions.
If the policy stands, taxpayers will continue relying on the standard deduction and child-related credits instead of personal exemptions. Future Congresses could change the balance between simplicity and family-based support, which would especially affect larger households.
Practical steps for workers, families, and sponsors
Immediate, concrete actions:
- Review residency status before filing — resident and nonresident rules differ for the standard deduction and credits.
- Check eligibility for child and dependent credits — confirm Social Security numbers and ages for each child.
- Update Form W-4 after major life changes or status shifts during the year.
- Keep copies of Form 1040 or Form 1040-NR, W-2s, and pay statements for immigration filings like Form I-864.
- Renew ITINs early if needed and keep names and addresses consistent across forms.
- Consider estimated tax payments if withholding runs short (after job changes or bonuses).
Child-related credits and ITIN issues
- The Child Tax Credit rose to $2,000 per qualifying child with a higher income threshold; part is refundable.
- Eligibility rules matter: Social Security number requirements for qualifying children and for taxpayers limit who can claim the credit.
- Families with ITINs:
- May claim the Credit for Other Dependents in some cases.
- Cannot claim the Child Tax Credit for a child who lacks a valid SSN.
- May still face higher tax bills despite other credits replacing personal exemptions only partially.
For ITIN filers, Form W-7 remains the path to an identification number for tax purposes. Renew expired ITINs promptly so refunds are not delayed.
Employer and university roles
- HR should explain that pre-2018 personal allowances no longer exist on the W-4.
- The new W-4 estimates tax using numbers (wages, credits, other income) rather than allowances.
- Multinational companies should coordinate with tax advisors for:
- Dual-status returns
- Treaty rules and documentation
- Universities and payroll departments increasingly brief international students on withholding, residency tests, and the transition from personal exemptions to the standard deduction.
Impact examples and everyday stories
- An H-1B software engineer who changes jobs and gets a raise late in the year may owe tax if W-4 isn’t updated.
- An F-1 graduate student who crosses the substantial presence threshold mid-year gains access to the standard deduction and some credits, affecting withholding and refunds.
- A U.S. citizen sponsoring parents must present clear tax returns for consular processing; absence of personal exemptions doesn’t prevent showing sufficient income if well-documented.
Itemizing vs. standard deduction
- The larger standard deduction means itemizing is worthwhile only if mortgage interest, charitable gifts, and state and local taxes together exceed the standard deduction — and if SALT caps don’t limit benefits.
- Many households that itemized before 2018 now take the standard deduction.
- New arrivals often consult tax preparers or community clinics to determine whether itemizing helps, particularly in high-tax states.
Official resources
- Form 1040 for resident taxpayers: https://www.irs.gov/forms-pubs/about-form-1040
- Form 1040-NR for nonresident taxpayers: https://www.irs.gov/forms-pubs/about-form-1040-nr
- Form W-4 for wage withholding: https://www.irs.gov/forms-pubs/about-form-w-4
- Form W-7 for ITIN applications: https://www.irs.gov/forms-pubs/about-form-w-7
- Form I-864, Affidavit of Support (USCIS): https://www.uscis.gov/i-864
- IRS Publication 501 (filing status, dependents, standard deduction): https://www.irs.gov/publications/p501
Key takeaway: personal exemptions are gone. The standard deduction plus child and dependent credits now determine how families lower taxable income. The 2025 legislation aims to make this repeal permanent so taxpayers won’t face a sudden rule reversal at year-end.
Recommendations for immigrant communities and advocates
- Community groups: hold tax nights each January to explain the W-4 changes, the end of personal exemptions, and available credits.
- Employers: offer orientation for international hires about residency status, correct form choice (Form 1040 vs. Form 1040-NR), and withholding.
- Universities: brief international students on how residency changes affect filing and credits once the substantial presence test is met.
Advocates stress outreach because errors in W-4 entries, dependency claims, or ITIN renewals can lead to surprise tax bills or stalled immigration cases.
Final summary
- The Tax Cuts and Jobs Act removed personal exemptions starting in 2018.
- The standard deduction is now central to the filing system and is indexed for inflation.
- Child Tax Credit and the Credit for Other Dependents provide targeted relief, but eligibility rules limit reach for some immigrant households.
- In 2025, Congress moved to extend much of the TCJA framework and to permanently repeal personal exemptions, aiming to avoid a sudden change after December.
- Families should focus on accurate withholding, careful dependency claims, timely ITIN renewals, and consistent records to support both tax filings and immigration processes.
This Article in a Nutshell
The Tax Cuts and Jobs Act eliminated personal exemptions beginning in 2018 and increased the standard deduction while expanding the Child Tax Credit. In 2025, Congress moved to extend most TCJA provisions beyond their scheduled 2025 expiration and to permanently repeal personal exemptions to prevent tax increases afterward. The policy shift simplifies withholding and returns for many taxpayers but produces uneven outcomes for larger households, mixed-status families, and immigrants who may be limited by credit eligibility and SSN/ITIN rules. The change affects paycheck withholding (Form W-4), residency-based filing (Form 1040 vs. 1040-NR), and immigration support documents like Form I-864. Practical advice includes reviewing residency status, updating W-4s, renewing ITINs, verifying children’s SSNs, and keeping consistent documentation for both tax and immigration purposes.
