Qualifying Relative

1. Qualifying Relative

If any of the qualifying child requirements are not met, it only means they are not a qualifying child. They may still be a qualifying relative dependent, and those requirements are considered next.

For an individual to be a qualifying relative (QR) of a taxpayer, an individual must satisfy four tests:

1. Not a Qualifying Child test (test #10)
2. Relationship or Member of the Household test (test #11)
3. Gross Income test (test #12)
4. Support test (test #13)

1a. (10) Not a Qualifying Child Test

To meet this test, the potential dependent must not be the qualifying child of the taxpayer or of any other taxpayer. In other words, a potential dependent who is a qualifying child of one taxpayer cannot be claimed as a qualifying relative by another taxpayer.

EXAMPLE

Remember Melissa, from the previous Qualifying Child Example? Melissa (17) is a qualifying child of her mother, Jill. She did not meet the residency requirement for Rhett, her stepfather. Because Melissa is a qualifying child of Jill, she cannot be a qualifying relative of Rhett. Additionally, because she is Jill’s qualifying child, Melissa cannot be Jill’s qualifying relative.

EXAMPLE

Yolanda lives with her daughter, Elizabeth. Elizabeth is the qualifying child of Yolanda. Neither Yolanda nor anyone else can claim Elizabeth as their qualifying relative, since Elizabeth meets the definition of a qualifying child.

EXAMPLE

Ron (35) and Sue (35) are married and have two children, Todd (8) and Tracy (6). Neither child has income. Stacy (13), Sue’s child from a previous marriage, came to live with them on July 4, 2022. Prior to moving in with Ron and Sue, Stacy lived with her father, John.

Todd and Tracy are the qualifying children of Ron and Sue.

Stacy is neither a qualifying child nor a qualifying relative of Ron and Sue. Because she lived with her father, John, for more than six months, she is his qualifying child. (She meets relationship, age, residency, support, and joint return for him.) She cannot be a qualifying child for Ron and Sue (fails the Residency test) and is not a qualifying relative of Ron and Sue (fails the Not a Qualifying Child test).

EXAMPLE

Aiden #1
Daniel would like to claim Aiden as his dependent. Aiden (55) is Daniel’s uncle. He is not disabled. Aiden lives about 20 minutes from Daniel. Daniel pays Aiden’s rent and provides his groceries. He pays on average $2,200 a month to support Aiden. Aiden’s gross income is $350 a month. Aiden spends it all on his groceries. He has no savings, investments, or any other income.

Since Aiden is 55 years old and not disabled, he could not be a qualifying child of another taxpayer. Because of this, he would pass the Not a Qualifying Child test for a qualifying relative.

We will come back to Aiden with more examples in this section.

1b. (11) Relationship or Member of the Household Test

The relationship test for a qualifying relative is broader than the test for a qualifying child. The individual must meet one of two requirements:

1. Relationship, or
2. Member of the household

hint

Relationships for the qualifying relative relationship test that were established by marriage are not ended by death or divorce.

If the taxpayer files a joint return, the person can be related to either the taxpayer or their spouse. For example, a spouse’s uncle who receives more than half of his support from the taxpayer may be claimed as the taxpayer’s qualifying relative, due to the relationship, even though the uncle does not live with the married couple. However, if the taxpayer and their spouse file separate returns, the spouse’s uncle can only meet the qualifying relative test if the spouse’s uncle lives with the taxpayer all year under the member of household part of the requirement.

Per Publication 17, a taxpayer does not meet this test if, at any time during the year, the relationship between the taxpayer and the potential dependent violates local law.

The Relationship or Member of the Household test has caused a lot of confusion among tax preparers. It is important to realize this test is a choice between the two options. The potential dependent either passes by having one of the required relationships, or they pass the member of the household part by living with the taxpayer the entire year.

EXAMPLE

Aiden #2
Daniel would like to claim Aiden as his dependent. Aiden (55) is Daniel’s uncle. He is not disabled. Aiden lives about 20 minutes from Daniel. Daniel pays Aiden’s rent and provides his groceries. He pays on average $2,200 a month to support Aiden. Aiden’s gross income is $350 a month. Aiden spends it all on his groceries. He has no savings, investments, or any other income.

Since Aiden is Daniel’s uncle, he would pass the relationship part of the Relationship or Member of the Household test.

Note: Aiden would not have to live with Daniel at all during the year to pass this test.

EXAMPLE

Monica is Daniel’s cousin. She lived with Daniel for seven months during the tax year.

Since Monica does not meet the relationship portion of the Relationship or Member of the Household test, and did not live with Daniel the entire year, she cannot be his qualifying relative dependent.

Note: Being cousins alone will not meet the relationship test for qualifying relative, because a cousin is not listed as a specific relative relationship. However, a cousin, like other non-relatives, may meet the Relationship or Member of Household test for qualifying relative if the individual lived in the taxpayer’s home for the entire year.

1c. (12) Gross Income Test

If the potential dependent has a gross income, it must be less than $4,400 for 2022.

hint

When determining an individual’s gross income for the year, do not include tax-exempt income, such as certain Social Security benefits.

For example, if the potential dependent's Social Security benefits are their only income, their Social Security benefits would not be included in gross income. There is a formula to determine how much, if any, of Social Security income is included as taxable income. Typically if a taxpayer only has Social Security income, the income is considered tax-exempt income, thus is not used when determining gross income for the qualifying relative test. This exception to certain Social Security benefits being tax-exempt income will be discussed in greater detail in the Retirement chapter.

EXAMPLE

Aiden #3
Daniel would like to claim Aiden as his dependent. Aiden (55) is Daniel’s uncle. He is not disabled. Aiden lives about 20 minutes from Daniel. Daniel pays Aiden’s rent and provides his groceries. He pays on average $2,200 a month to support Aiden. Aiden’s gross income is $350 a month. Aiden spends it all on his groceries. He has no savings, investments, or any other income.

Since Aiden’s gross income is less than $4,400 for the year, he would pass the Gross Income test. (His gross income was $4,200 ($350 × 12 months.)

EXAMPLE

Tony (28) and Adam (27) are cousins and lived in the same home throughout the tax year. No one else lived in their household. Adam is not disabled. Adam only earned $2,500. Tony earned $25,000. Adam meets the Member of Household portion of the Relationship or Member of Household test for Tony since Adam lived with Tony the entire year. Adam meets the gross income requirement since his gross income is less than $4,400. Assuming that Adam meets the remaining tests, Tony may be able to claim Adam as a qualifying relative dependent.

term to know

Gross Income

Total worldwide income received in the form of money, property, or services that is subject to tax.

1d. (13) Support

As mentioned earlier, the support test for a qualifying relative is different than for a qualifying child. Remember, the support test for a qualifying child is the child must not provide more than half of their own support. The test for a qualifying relative depends on the taxpayer providing over one-half of the support for the potential dependent to satisfy the test.

Remember, a potential dependent’s own funds are not counted as support unless they actually spent those funds on supporting themselves.

In figuring out a potential dependent’s total support, include tax-exempt income, savings, and borrowed amounts used to support that person. Tax-exempt income includes certain Social Security benefits, welfare benefits, nontaxable life insurance proceeds, Armed Forces family allotments, nontaxable pensions, and tax-exempt interest.

If a potential dependent receives Social Security benefits and uses them toward their own support, the benefits are considered as provided by the potential dependent.

EXAMPLE

Aiden #4
Daniel would like to claim Aiden as his dependent. Aiden (55) is Daniel’s uncle. He is not disabled. Aiden lives about 20 minutes from Daniel. Daniel pays Aiden’s rent and provides his groceries. He pays on average $2,200 a month to support Aiden. Aiden’s gross income is $350 a month. Aiden spends it all on his groceries. He has no savings, investments, or any other income.

Since Daniel provided over one-half of Aiden’s support, he would pass the support test.
Note: Aiden spent $4,200 ($350 × 12) on his own support or 13.73%, and Daniel spent $26,400 ($2,200 × 12), or 86.27%.

Aiden passed all of the qualifying relative tests. He is Daniel’s qualifying relative dependent.

EXAMPLE

John lives with Robert, his father. John provides 30% of Robert’s support. John may not claim Robert as a dependent, because John failed the qualifying relative support test by not providing more than 50% of Robert’s support.

EXAMPLE

Gerald (69; his birthday is June 5, 1952) is single and lives with his son, Kyle (49), and Kyle’s wife, Kim (48). The fair rental value of their home, which is owned by Kyle and Kim, is $18,000. They pay $1,500 per month in rent, and the utilities cost another $4,500 for the whole year. The food cost for the family is $7,500. Entertainment expenses for Kyle and Kim were $6,000.

Total Household Expenses: $30,000 ($18,000 + $4,500 + $7,500)

Gerald’s beginning savings account balance equaled $23,517. Gerald’s income consists of $9,658.80 in Social Security benefits (his Medicare cost was $1,626) and an interest income of $450.

Gerald’s Funds: $33,626

After paying his Medicare of $1,626, Gerald spends $4,200 for a golf membership and tickets to sporting events and puts the remaining Social Security of $3,833 in savings (at the end of the year, he had $27,350 in his savings account). The $450 interest income is used for personal grooming items.

Amounts Gerald Spent: $6,276 ($1,626 + $4,200 + $450)

Kyle and Kim pay Gerald’s health costs not covered by Medicare, which were $3,200 during the year, and all household expenses.

Kyle and Kim Spent: $3,200

Gerald’s total expenses:

• One-third of entire household expenses: $10,000 [$30,000 ÷ 3 (number of people who live in the home)]
• Medical and Dental: $4,826 ($1,626 + $3,200)
• Travel and recreation: $4,200
• Other expenses: $450

Gerald will meet all of the requirements to be a qualifying relative if Kyle and Kim provide more than one-half of his support. Remember, his Social Security income does not count in determining whether his income is greater than $4,400 since it is not considered gross income in his situation.

Video Review 2 also shows a breakdown of the line entries on the above form.

2. Qualifying Relative Example

We will use the Definition of a Dependent chart to work through this example scenario and determine whether the potential dependent (Aubrey) is a qualifying child, qualifying relative, or not a dependent of Oliver and Hannah.

Aubrey (22) lived with both of her parents, Oliver and Hannah, for five months in 2022. She had moved out to attend college two years ago, but she dropped out of school in 2021 and moved back into her parents’ home in late July 2022. Aubrey is not permanently and totally disabled.

Aubrey worked for part of the year. She had a total gross income of $3,000 from one job and another $1,000 from a second job.

Oliver and Hannah paid all the household expenses, bought the groceries, and paid Aubrey’s outstanding rent of $3,000 from her last apartment. They spent close to $6,000 total (including paying her overdue rent) for Aubrey’s support during the year.

Aubrey spent all of her income on her entertainment and paying off her remaining unpaid bills. Aubrey’s boyfriend paid $1,500 of Aubrey’s credit card bills during the year.

We will determine if Aubrey is a qualifying child, qualifying relative, or not a dependent of her parents.

2a. Aubrey—Qualifying Child?

1. Passed. Oliver and Hannah are not dependents of another taxpayer.
2. Passed. Aubrey is not married and did not file a joint return.
3. Passed. Aubrey is a U.S. citizen.

4. Passed. Aubrey is Oliver and Hannah’s daughter.

5. Failed. Aubrey is under the age of 24, but not a full-time student or permanently and totally disabled.

Aubrey is not Oliver and Hannah’s qualifying child. The next step is to determine if she is their qualifying relative.

2b. Aubrey—Qualifying Relative?

10. Passed. Aubrey is not a qualifying child of her parents or of any other taxpayer.

11. Passed. Aubrey passes the relationship requirement for Relationship or Member of Household. She does not have to live with her parents at all during the year to pass this test since she is their daughter.

12. Passed. Aubrey’s gross income is $4,000.

13. Passed. Oliver and Hannah paid over half of Aubrey’s support. They paid 52.18%.

Her total support is $11,500 ($4,000 paid by Aubrey, $6,000 paid by Oliver and Hannah, and $1,500 paid by her boyfriend). Oliver and Hannah paid 52.18%. Aubrey paid 34.78% of her support. Her boyfriend paid 13.04%. [52.18% + 34.78% + 13.04% = 100%]

Because Aubrey satisfies all of the qualifying relative requirements, she is a qualifying relative dependent of Oliver and Hannah.