Qualifying Relative (QR) requirements

Question 1

What are the three tests for claiming any type of dependent (QR or QC)?

Answer 1

1. Citizenship Test
2. MFJ Test
3. TP or Spouse Not A Dependent Test

Question 2

What are the 4 Qualifying Relative tests?

Answer 2

1. Not a QC test
2. Member of household OR relationship test
3. Gross Income Test
4. Support Test

Question 3

What is the the “Not a QC” Test for QR?

Answer 3

1. A child is not your QR if he is your QC or the QC of someone else

Question 4

When could a QC become a QR for someone other than the parents?

Answer 4

If the child’s parents are not required to file a tax return and either:

1. do not file the tax return
2. only file a tax return to get back withholdings or estimated payments(Can’t claim any deductions/credits)

Question 5

What is the “Member of the Household” OR Relationship” test for QR?

Answer 5

1. anyone that lived in your household all year
   OR
2. A qualifying relative that did/did not live with you:
   -children-descendants
   -parents-ancestors-siblings(Aunts/uncles)
   - brother/sister - descendants
   -Step:mom/dad/sis/bro (include half)
   -In-laws: mom/dad/bro/sis
   *these relationships do not end with divorce or death
   not cousins

Question 6

A “member of the household” must live with you all year to be a QR. What are acceptable temporary absences? (6)

Answer 6

1. Medical (nursing home)
2. education
   3 . business
   4.Military
3. vacation
4. Juvenile facility
   * a person who died or was born during the year also meets the member of the household all year test

Question 7

Can a cousin be a QR?

Answer 7

No. A cousin does not meet the relative test so they must live with you all year in order to meet the member of the household test.

Question 8

What is the QR “ Gross Income” test?

Answer 8

GI < $4200

Question 9

Gross Income Test: What income is included in GI?

Answer 9

All income received that is not exempt from taxes.

Question 10

Gross Income Test: Is rental income included in GI?

Answer 10

Yes: Rental Income is included and should NOT be reduced by rental expenses

Question 11

Gross Income Test: Is business income included in GI?

Answer 11

Yes: Business Income = Net Sales + Misc Income - Cost of Goods sold

Question 12

Gross Income Test: Is unemployment included in GI

Answer 12

yes

Question 13

Gross Income Test: Is social security included in GI?

Answer 13

Generally excluded UNLESS additional income is received.

Question 14

Gross Income Test: Is income earned by a person permanently and totally disabled included in GI?

Answer 14

Do not include income for services performed in a sheltered workshop setting

Question 15

How could a child living in Canada or Mexico be considered a QR?

Answer 15

1. the child is not living with TP so he can’t be TPs Qualifying child
   2 . Child meets “relative” test for QR
2. Child lives with someone who is not a US citizen and does not have US gross income - they are not US taxpayers so the child can not be their QC
3. Child meets the gross income and support test

Question 16

What is a multiple support agreement?

What are the two conditions?

Answer 16

If 2 or more people provide more than 1/2 support of a child they can agree that one will claim the dependent.

1. the person claiming the dependent must pay more than 10% of the child’s support
2. No one else can pay over 1/2 the total support

Question 17

When is a Multiple Support Agreement used for a QR?

Answer 17

When 2 or more people provide support but no one provides more than 1/2 the support

Question 18

How are QR tests different from QC tests?

Answer 18

1. QR does not have age tests

2. a QR does not have to live with you

Question 19

Support Test: Is non-taxable income included?

Answer 19

yes

Question 20

Support Test: How do calculate lodging for support?

Answer 20

FMV of home +allowances for furniture/appliances+utilities/#people in the home

Question 21

Support Test: What expenses can be used to calculate support?

Answer 21

Expenses that are contributing to the maintenance and livelihood of the individual:
1. food
2. lodging-fmv
3. clothing
4. education
5.med + dental
6. recreation
7.transportation
etc
*divide by # of people in house benefited

Question 22

Support Test: What is the “support test” for QR?

Answer 22

A TP must pay more than 1/2 the QR support.

The QR’s funds only count as support if they are actually spent on their own support.

Question 23

What are the 3 tests for becoming a dependent of any type (QR or QC)?

Answer 23

1. Citizenship: dependent must be US citizen, US national, US non-resident alien, resident of Canada or Mexico
2. TP can not be a dependent.
3. MFJ test - you can not claim someone who filed MFJ as a dependent unless they only filed MFJ to be refunded with holdings or estimated payments

Question 24

Can the taxpayer’s spouse be a dependent?

Answer 24

No

Question 25

What is the Age Test for QR?

Answer 25

There is none.

Question 26

Support Test: What items are excluded by the TP when calculating support for a dependent? (4)

Answer 26

1. Scholarships received by dependent
2. taxes
3. life insurance premiums
4. medical insurance benefits (med insurance pays)
5. .Capital items (ie: furniture) purchased for personal/family reasons for the benefit of the entire family

Question 27

If a relationship test violates local law can it be counted for the Relationship Test?

Answer 27

no

Question 28

Support Test: Can income from a loan used for dependents support be included in the calculation?

Answer 28

yes

Question 29

Support Test: Are welfare benefits included in the support calculation?

Answer 29

yes

Question 30

Support Test: Are social security benefits included in the support calculation?

Answer 30

yes

Question 31

Support Test: Is child support included in the calculation?

Answer 31

Only the amounts paid during the year. Do not include child support paid that was owed from prior years.