The Law Dictionary

Your Free Online Legal Dictionary • Featuring Black’s Law Dictionary, 2nd Ed.

EXEMPTION PHASEOUT Definition & Legal Meaning

Definition & Citations:

A growing obligation of taxable value that increases the amount of tax due as the total earnings of the taxpayer increases. A formula in the U.S. tax code. Sets thresholds of increasing percentage for higher-income and earning taxpayers. Typical formulation increases the obligation by 2% for each $2,500 of additional income over threshold levels.

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