A Tax exemption excludes a portion of your income from taxation.
Specifically, according to tax law, "Exempt income" is legally defined in 26 CFR Sec. 861-8T(d)(2)(ii).
But, you'll see Income tax law does not list what income is specifically exempt.
Instead, US tax law specifically lists the opposite, Income that is not exempt, in the paragraph that follows, Sec. 861-8T(d)(2)(iii), ... which means, in simpler terms, Taxable income.