Qualifying relative

What Is Qualifying Relative?

A qualifying relative is an individual who meets specific criteria established by the Internal Revenue Service (IRS) that allows a taxpayer to claim them as a dependent on their federal income tax return. This designation is crucial in personal tax planning as it can enable the taxpayer to claim various tax benefits, such as the Credit for Other Dependents, and potentially qualify for certain filing statuses, like Head of Household. The rules for a qualifying relative are detailed and include income, support, and relationship or residency tests. Unlike a qualifying child, a qualifying relative does not have an age test and can be an adult.

History and Origin

The concept of claiming dependents for tax purposes has evolved significantly over the history of U.S. income tax law. Prior to the Tax Cuts and Jobs Act (TCJA) of 2017, taxpayers could claim a personal exemption for themselves, their spouse, and each dependent, including qualifying relatives. This exemption reduced a taxpayer's taxable income directly. However, the TCJA, signed into law in December 2017, made substantial changes to individual income tax provisions. A major element of this reform was the repeal of personal and dependent exemptions for tax years 2018 through 2025.³⁶, ³⁷

In place of these exemptions, the TCJA significantly increased the standard deduction and expanded existing credits while introducing new ones. For dependents who do not meet the criteria for a qualifying child (e.g., due to age or relationship), the TCJA introduced the "Credit for Other Dependents," often referred to as the "non-child dependent credit." This shift from an exemption to a credit altered the financial benefit of claiming a qualifying relative, making the determination of a qualifying relative still essential for accessing these credits.³⁴, ³⁵

Key Takeaways

• A qualifying relative is a type of dependent recognized by the IRS, allowing a taxpayer to claim specific tax benefits.
• Key tests for a qualifying relative include gross income, support, and either a relationship or residency requirement.
• The Tax Cuts and Jobs Act of 2017 eliminated personal and dependent exemptions, replacing them with expanded credits like the Credit for Other Dependents.
• Claiming a qualifying relative can allow a taxpayer to utilize the Credit for Other Dependents, which can be worth up to $500.
• The rules for claiming a qualifying relative are found in IRS Publication 501.

Formula and Calculation

While there isn't a single "formula" for a qualifying relative, their eligibility is determined by meeting several interconnected tests, each with specific numerical or relational criteria. These tests ensure the individual is genuinely dependent on the taxpayer for support.

1. Not a Qualifying Child Test: The individual cannot be the taxpayer's qualifying child or the qualifying child of any other taxpayer.³³

2. Gross Income Test: The individual's gross income for the tax year must be less than a specific threshold. For instance, for 2024, the gross income limit is less than $5,050, increasing to less than $5,200 for 2025. This threshold is subject to annual inflation adjustments by the IRS.³¹, ³²

$\text{Gross Income} < \text{Exemption Amount (e.g., \$5,050 for 2024, \$5,200 for 2025)}$

• Gross Income: All income received in money, goods, property, and services that is not exempt from tax. Importantly, tax-exempt income, such as certain Social Security benefits, generally does not count toward this limit unless specific conditions are met, such as if half of the Social Security benefits plus other gross income and tax-exempt interest exceed a certain threshold.²⁸, ²⁹, ³⁰

3. Support Test: The taxpayer must provide more than half of the individual's total support for the year. This involves calculating all expenses incurred for the individual's support and ensuring the taxpayer's contribution exceeds 50%. This can include costs for food, lodging, education, medical care, and other necessities.²⁶, ²⁷

4. Member of Household or Relationship Test: The individual must either:
* Live with the taxpayer all year as a member of their household (even if not related, provided the relationship does not violate local law).²⁴, ²⁵
* Be related to the taxpayer in one of the specified ways, even if they do not live with the taxpayer. This includes a child, stepchild, foster child, sibling, half-sibling, stepsibling, parent, stepparent, ancestor, nephew, niece, aunt, uncle, son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law.²², ²³

Interpreting the Qualifying Relative

Interpreting the rules for a qualifying relative is critical for taxpayers seeking to leverage available tax benefits. The tests are designed to prevent multiple claims for the same individual and ensure genuine financial dependency. For the gross income test, it is essential to distinguish between taxable and non-taxable income sources. For example, while wages and interest income count towards the gross income limit, many forms of government assistance, such as Supplemental Security Income (SSI) or non-taxable Social Security benefits, typically do not.²⁰, ²¹

The support test often requires careful record-keeping, especially when multiple individuals contribute to a person's upkeep or when the potential dependent has some income of their own. If no single person provides more than half the support, but a group does, a multiple support agreement may allow one person in the group to claim the dependent. The relationship or member of household test ensures that only legally or household-defined relationships qualify, preventing claims for casual associations. Understanding these nuances helps taxpayers accurately assess their eligibility and avoid potential IRS issues.

Hypothetical Example

Sarah, a single taxpayer, supports her mother, Maria, who is 70 years old. Maria lives in her own apartment but relies significantly on Sarah for financial assistance.

Scenario:

• Gross Income Test: Maria's only income in 2024 was $4,500 from a part-time job and $8,000 in non-taxable Social Security benefits. For the purpose of the gross income test, only her taxable income of $4,500 is counted. Since $4,500 is less than the 2024 gross income limit of $5,050, Maria meets this test.¹⁸, ¹⁹
• Support Test: Maria's total annual living expenses (rent, food, utilities, medical, etc.) amounted to $15,000. Sarah contributed $8,500 towards these expenses, while Maria used her $4,500 from work and $2,000 from savings. Since Sarah provided $8,500, which is more than half of Maria's $15,000 total support, the support test is met.
• Relationship Test: Maria is Sarah's mother, which satisfies the relationship requirement.

Based on these facts, Sarah can claim Maria as a qualifying relative on her 2024 tax return. This allows Sarah to potentially claim the Credit for Other Dependents, which can reduce her overall tax liability.

Practical Applications

The designation of a qualifying relative has several practical applications in federal taxation:

1. Credit for Other Dependents: This is the primary benefit of claiming a qualifying relative since the elimination of personal exemptions. For 2024, this credit can be worth up to $500 for each qualifying dependent who is not a qualifying child. This is a nonrefundable tax credit, meaning it can reduce a taxpayer's tax liability to zero but will not result in a refund beyond that.¹⁶, ¹⁷
2. Head of Household Filing Status: A taxpayer may be able to file as Head of Household, which typically offers a larger standard deduction and more favorable tax rates than filing as Single, if they provide more than half the cost of keeping up a home for themselves and a qualifying person, which can include a qualifying relative.¹⁵
3. Dependent Care Credit: If the qualifying relative is a disabled individual of any age and requires care, the taxpayer may be eligible for the Child and Dependent Care Credit for expenses paid for their care to allow the taxpayer to work or look for work.
4. Medical Expense Deduction: A taxpayer can include medical expenses paid for a qualifying relative when calculating their itemized deductions. This can be significant for taxpayers with substantial unreimbursed medical costs for their dependents.
5. Adoption Tax Credit: While typically associated with children, in certain cases, a qualifying relative who is a child with special needs may be part of an adoption where the taxpayer can claim the adoption tax credit.

These applications underscore the importance of understanding and correctly applying the qualifying relative rules to maximize tax efficiency. Taxpayers can find detailed guidance on these rules in IRS Publication 501, which the Internal Revenue Service publishes annually.¹³, ¹⁴

Limitations and Criticisms

Despite its benefits, the concept of a qualifying relative and the associated tax provisions come with limitations and have faced some criticisms:

1. Gross Income Limit: The fixed gross income limit can be a significant hurdle. For individuals with modest but taxable income, even if they are heavily reliant on a taxpayer for support, they may not qualify if their income slightly exceeds the threshold. This can be particularly challenging for elderly dependents receiving retirement income that is partially taxable.
2. Support Test Complexity: Calculating "more than half of support" can be complex, especially in situations involving multiple contributors or when the dependent has their own income from various sources, including non-taxable benefits like Social Security. While non-taxable income generally isn't included in the gross income test, it is considered when determining who provides support. If a person's Social Security benefits largely cover their own expenses, they might not meet the support test.¹¹, ¹²
3. Elimination of Personal Exemption: The TCJA's elimination of the personal exemption for dependents, including qualifying relatives, removed a direct reduction in taxable income. While replaced by a credit, the $500 Credit for Other Dependents may not always provide the same level of tax benefit as the previous exemption, especially for taxpayers in higher tax brackets or with multiple dependents. This shift was part of a broader tax reform that simplified some aspects of tax filing but increased the tax burden for some households. Information on the broader impacts of the TCJA is available from various sources, including the Tax Policy Center.¹⁰
4. Social Security Number Requirement: To claim any dependent, including a qualifying relative, the individual generally must have a valid Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN). This can be a barrier for individuals who are not U.S. citizens or residents with an SSN.⁹

These limitations highlight the need for taxpayers to meticulously track financial contributions and understand the specific IRS guidelines to correctly claim a qualifying relative.

Qualifying Relative vs. Qualifying Child

The Internal Revenue Service distinguishes between two types of dependents: a qualifying relative and a qualifying child. While both categories allow a taxpayer to claim specific tax benefits, they have distinct criteria that lead to different tax implications, particularly concerning the type and amount of credits available.

The most significant differences lie in the age, relationship, and residency tests. A qualifying child must meet an age test (generally under 19 or under 24 if a full-time student, or any age if permanently and totally disabled) and must have lived with the taxpayer for more than half the year (with some exceptions). They also must be the taxpayer's child, stepchild, foster child, sibling, stepsibling, or a descendant of any of them. If all conditions are met, a qualifying child can make the taxpayer eligible for the Child Tax Credit, which is generally more valuable than the Credit for Other Dependents.

In contrast, a qualifying relative has no age test, meaning they can be an adult. Their gross income must be below a certain threshold (e.g., $5,050 for 2024), whereas a qualifying child can have unlimited gross income as long as they don't provide more than half of their own support. For a qualifying relative, the residency test is more flexible: they either must live with the taxpayer all year as a member of their household (even if unrelated, provided the relationship is not illegal) or be one of a broader list of specified relatives who do not necessarily need to live with the taxpayer. The key benefit for a qualifying relative is typically the nonrefundable Credit for Other Dependents, up to $500, rather than the larger Child Tax Credit.

FAQs

Q1: What is the main difference between a qualifying relative and a qualifying child?

A1: The primary differences are age and residency. A qualifying child has an age limit (generally under 19 or a student under 24) and must live with you for more than half the year. A qualifying relative has no age limit, but their gross income must be below a specific amount, and they must either live with you all year or be a specific type of relative.⁸

Q2: Can I claim my parents as a qualifying relative?

A2: Yes, you can claim your parents as a qualifying relative if they meet all the IRS criteria, including the gross income test and the support test (you must provide more than half of their total support for the year). Your parents are on the list of specified relatives, so they do not need to live with you to meet the relationship test.⁶, ⁷

Q3: Do Social Security benefits count towards the gross income test for a qualifying relative?

A3: Generally, non-taxable Social Security benefits do not count toward the gross income test for a qualifying relative. However, if a portion of the Social Security benefits is taxable based on the individual's other income, that taxable portion would be included in gross income. It is important to note that Social Security benefits do count as support provided by the individual when determining the support test.⁴, ⁵

Q4: What tax benefits can I get from claiming a qualifying relative?

A4: The main tax benefit is typically the Credit for Other Dependents, which can be up to $500. Additionally, claiming a qualifying relative may allow you to qualify for the Head of Household filing status, deduct medical expenses paid for them, and potentially claim the Child and Dependent Care Credit if they are disabled and require care.², ³

Q5: What happens if two people could potentially claim the same qualifying relative?

A5: If more than one person could claim an individual as a qualifying relative, a tie-breaker rule applies. Generally, the person who provided more than half of the individual's support would claim them. If multiple people provided more than 10% of the support but none provided more than half, they can agree among themselves who will claim the dependent using a multiple support agreement.¹