Number of Dependents Qualified as Additional Exemptions for Income Tax Purposes

May 22, 1973 BIR RULING NO. 016-73 Number of dependents qualified as additional exemptions for income tax purposes : Since the proviso of Section 23(c) of the Tax Code, as amended by Presidential Decree No. 69 is of prospective application, individual taxpayers who have five (5) or more qualified dependent children as of December 31, 1972 can continue to claim the additional exemption for the total number of such dependents for the calendar year beginning January 1, 1973, and subsequent years provided that as of the end of said calendar years such dependents meet the requirements enumerated in Section 23(c) of the Tax Code, as amended by Presidential Decree No. 69 which for ready reference and guidance is quoted hereunder as follows: "(c) Additional exemption for dependents . The sum of one thousand for each legitimate, recognized natural, or adopted child, wholly dependent upon and living with the taxpayer if such dependents are not more than twenty-one years of age, unmarried, and not gainfully employed or incapable of self-support because mentally or physically defective. The additional exemption under this subsection shall be allowed only if the person making the return is the head of the family, Provided, however, That the total number of dependents for which additional exemptions may be claimed shall not exceed four dependents." (BIR Ruling No. 73-013, dated April 16, 1973) However, the said taxpayer cannot claim in their 1973 returns, additional exemption for their children who are born during the calendar year 1973 if their qualified dependents children as of December 31, 1972 exceed four (4). The same rule holds true in subsequent calendar years until the qualified dependents before the calendar year 1973 shall have been reduced to less than four (4) dependents, in which event, the taxpayer can claim additional exemption for those born after December 31, 1972, but he will then be limited to a maximum of four (4) dependents, inclusive of those born before and after January 1, 1973.