Lawmaker wants age bracket of taxpayers’ dependents raised to 23

MANILA, Philippines - A bill in the House of Representatives is seeking to raise the age bracket of dependents of taxpayers from 21 to 23 years old.

The rationale is the K-12 curriculum adding two years to the educational system.

House Bill 4788 author Parañaque Rep. Eric Olivarez said the K-12 curriculum would require breadwinners to sustain the education of their children or immediate relatives – brother or sister – two years longer than before.

“Because of this, it is only proper to amend… sections of the National Internal Revenue Code which provides for the age limitation of household members who may qualify as dependents in order to avail of tax exemptions, if only to avoid defeating the purpose and wisdom of these specific provisions of the NIRC,” he said.

Olivarez said the wisdom behind tax exemptions for income-earning individuals is to avoid unreasonably taxing them while they support a number of dependent household members.

“These dependents are presumed to be still studying and therefore unable to work for self-support, or because the person being sustained by the income earner is physically or mentally restrained from providing for himself,” he said.

The state understands that an income earner has an obligation first and foremost to his or her family and imposes lesser taxes for their benefit, Olivarez said.

Now pending at the House committee on ways and means, the bill seeks the amendment of Section 29, paragraph (L) on personal exemptions allowable to individuals, items (1), (2) and (3) of the NIRC.

The amendment to Item (1) provides: “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 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.”

The amendment to Item (2) provides: “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.”

The amendment to Item (3) provides: “If the spouse or any of the dependents should die or if any of such dependents becomes 23 years old during the taxable year, the taxpayer may still claim the same exemptions as if they died, or if such dependents become 23 years old at the close of such year.”