The question of when to use a hyphen – i.e. a horizontal line connecting two words – often causes problems.
Most writers are comfortable with the idea of using hyphens to connect a prefix to a word. For instance, legal terms beginning with non-, pre-, co- are often hyphenated, and common examples include non-statutory, pre-trial, co-defendant.
However, confusion arises when it comes to connecting separate words together – should a hyphen be used or not?
In brief, the rule is that hyphens are used to connect words that are more closely connected to each other than the surrounding syntax. This is often the case when one word is a noun (e.g. tax) and the other word is an adjective (e.g. exempt) or adverb (e.g. neutrally), and particularly where these words taken together have an adjectival function. For example, take the sentence:
The company made a tax-exempt transfer.
The words tax-exempt are clearly more closely connected than the surrounding words, and taken together they have the role of an adjective in relation to the word transfer – they describe the nature of the transfer. In other words, if you were to ask what kind of transfer was involved, you would get the answer – a tax-exempt transfer. And a hyphen would appear between tax and exempt to emphasise the unity of this term.
However, if both words involved are nouns, they are more likely to stand alone and not require hyphenation. So, while tax-exempt is hyphenated, tax exemption should not be hyphenated.
