Federal Individual Income Tax: Exemptions and Treatment of Dividends (1913-2021)

(a) For the years 1916-1943, the personal exemption allowed to joint filers was also allowed for heads of families. For 1948 and subsequent years, an additional exemption is granted to persons over 65 and to the blind.

(b) Tariff Act of October 3, 1913. Tax effective on income for last 10 months in 1913.

(c) For net incomes in excess of $5,000, personal exemption was $2,000

(d) $500 was the normal exemption per taxpayer in 1944, separate from an exemption on the income surtax

(e) In 1971, the increased personal and dependency exemptons were effective one-half of the year.

(f) For 1981-1982, the first $200 of combined dividend and interest income ($400 joint) was exempt. For income years 1981-1986, up to $750 ($1,500 for joint returns) of reinvested dividends of public utilities was exempt.

(g) Effective in 1985 and 1986, and after 1989, personal exemption allownces were adjusted by changes in the Consumer Price Index (CPI)

(h) Beginning in 1988, the personal exemption was phased-out for high income taxpayers

(i) Includes the 15 percent top marginal dividends tax rate plus the 3 percent Pease limitation on itemized deductions applied against the top marginal tax rate. The Pease limitation was phased out between 2006 and 2010, and was levied at 2 percent in 2006 and 2007 and 1 percent in 2008 and 2009. The Pease limitation was suspended for 2010, 2011, and 2012.

(j) Beginning in 2013, dividends were subject to the 3.8 percent net investment income tax (NIIT) for those with modified adjustment gross income above $200,000 filing single, $250,000 filing joint. The 3 percent Pease limitation on itemized deductions was reinstated in 2013 through 2017.

(k) The Tax Cuts and Jobs Act (TCJA) of 2017 made the personal exemption $0 and repealed the Pease limitation for tax years 2018 to 2025.