AUG 6, 2016

NR # 4284

Solon wants age bracket of taxpayers dependents raised

from 21 to 23 years old in light of K to 12 curriculum
A lawmaker is seeking to increase the age bracket of household members
considered as dependents of a taxpayer, from 21 to 23 years old, in light of the K to 12
curriculum, which added two more year levels in the countrys educational system.
Rep. Eric Olivarez (1st District, Paraaque City) said a person affected by the K to
12 Law is now expected to complete his or her education at age 23 on the average, instead
of 21.
As such, Olivarez said the income earners in the family would have to sustain the
education of their children or immediate relatives, like a brother or a sister, a little longer,
or two years longer than before according to Olivarez.
Because of this, it is only proper to amend the sections of the National Internal
Revenue Code (NIRC) which provide for the age limitation of household members who
may qualify as dependents for purposes of availing tax exemptions, if only to avoid
defeating the purpose and wisdom of the above-cited specific provision of the NIRC.,
said Olivarez.
The lawmaker said the NIRC provides certain tax exemptions to income-earning
individuals to avoid unreasonably burdening a person who has to provide for a number of
household members who are unable to support themselves just yet either because they are
still presumed to be studying and therefore unable to work for self-support and/ or the
person being sustained by the income earner is physically or mentally restrained from
providing for himself.
The State understands that an income-earner has an obligation first and foremost to
his or her family and the latter supports or assists the former by imposing lesser taxes
accordingly, said Olivarez.
In House Bill 183 or the proposed An Act Increasing the Age Bracket of
Taxpayers Dependents, Olivarez proposed amendments to Section 35 items (A) and (B)
of the NIRC, as amended by Republic Act 9504 titled Allowance of Personal Exemption
for Individual Taxpayer.
The bill has been referred to the House Committee on Ways and Means.
The proposed amendments provide that there shall be allowed a basic personal
exemption amounting to P50,000 for each individual taxpayer.

Moreover, there shall be allowed an additional exemption of P25,000 for each

dependent not exceeding four . The additional exemption for dependent shall be claimed
by only one of the spouses in the case of married individuals.
In the case of legally separated spouses, only the spouse who has custody of the
child or children may claim additional exemptions. The total amount of additional
exemptions that may be claimed by both shall not exceed the maximum additional
exemptions herein allowed.
The term Head of the Family means an unmarried or legally separated man or
woman with one or both parents, or with one or more brothers or sisters, or with one or
more legitimate recognized natural or legally adopted children living with and dependent
upon him for their chief support , where such brothers or sisters or children are not more
than 23 years of age, unmarried and not gainfully employed or where such children,
brothers or sisters regardless of age are incapable of self-support because of mental or
physical defect.
For additional exemption, a married individual or head of the family shall be
allowed an additional exemption of P5,000 for each dependent. The total number of
dependents for which additional exemptions may be claimed shall not exceed four
dependents.
A dependent means a legitimate, recognized natural or legally adopted child chiefly
dependent upon and living with the taxpayer if such dependent is not more than 23 years
of age, unmarried, and not gainfully employed or if such dependent, regardless of age, is
incapable of self-support because of mental or physical defect.
If the taxpayer marries or should have additional dependent(s) as defined above
during the taxable year, the taxpayer may claim the corresponding additional exemption,
as the case may be, in full for such year.
If the spouse or any of the dependents dies or if any of such dependents marries,
becomes 23 years old or becomes gainfully employed during the taxable year, the
taxpayer may still claim the same exemptions as if the spouse or any of the dependents
died, or as if such dependents married, became 23 years old or became gainfully
employed at the close of such year. (30) rbb