Exemption Legal Meaning and Definition

Here is a simplified definition of the legal term Exemption.

Exemption (noun)

  1. A legal provision that allows for a certain amount or certain factors (like age, disability or dependents) to lower the amount of income that is taxed. This is not the same as a deduction, which reduces the gross income before the tax is calculated.
  2. A condition or status that means you aren't required or obligated to do something that others might have to do. This can refer to situations like being excused from military service due to working in vital industries or having certain personal circumstances.