2.6 Qualifying Relative Test (4 Tests)

Enrolled Agent EA

Track your progress as you read

Finished sections get a check mark.

1 Part 1, Chapter 1: Tax Return Basics & Filing Requirements

1.1 Form 1040 Overview & Structure 1.2 Form 1040-SR for Seniors 1.3 Who Must File (Income Thresholds) 1.4 Filing Deadlines & Extensions (Form 4868) 1.5 Penalties: Failure to File vs. Failure to Pay 1.6 Sources of Tax Information (W-2s, 1099s, K-1s) 1.7 Preparer Due Diligence Requirements 1.8 Amended Returns (Form 1040-X)

2 Part 1, Chapter 2: Filing Status & Dependents

2.1 Single & Married Filing Jointly 2.2 Married Filing Separately 2.3 Head of Household Requirements 2.4 Qualifying Surviving Spouse 2.5 Qualifying Child Test (5 Tests) 2.6 Qualifying Relative Test (4 Tests) 2.7 SSN, ITIN & Residency Status

3 Part 1, Chapter 3: Wages & Employee Compensation

3.1 W-2 Income & Withholding 3.2 Employee vs. Independent Contractor 3.3 1099-NEC, 1099-MISC & 1099-K Reporting 3.4 Fringe Benefits (Taxable vs. Non-Taxable) 3.5 Stock Options (ISO vs. NQSO) 3.6 Special Categories (Clergy, Military, Foreign)

4 Part 1, Chapter 4: Interest, Dividends & Other Income

4.1 Taxable vs. Tax-Exempt Interest 4.2 US Savings Bonds & OID 4.3 Ordinary vs. Qualified Dividends 4.4 Schedule B Requirements 4.5 Rental & Royalty Income Basics 4.6 Alimony, Gambling & Other Income 4.7 Cancelled Debt & Form 1099-C 4.8 Net Operating Loss (NOL)

5 Part 1, Chapter 5: Capital Gains & Property Transactions

5.1 Capital vs. Non-Capital Assets 5.2 Cost Basis Calculation 5.3 Inherited & Gifted Property Basis 5.4 Short-Term vs. Long-Term Gains 5.5 Capital Gains Tax Rates (0%, 15%, 20%) 5.6 Netting & the $3,000 Loss Limit 5.7 Wash Sales & Related Party Rules 5.8 Sale of Primary Residence (Section 121) 5.9 Installment Sales (Form 6252) 5.10 Like-Kind Exchanges (Section 1031)

6 Part 1, Chapter 6: Adjustments to Income

6.1 Educator Expenses & HSA Contributions 6.2 Self-Employment Tax Deduction 6.3 IRA Contributions (Traditional) 6.4 Student Loan Interest Deduction 6.5 Alimony Paid (Pre-2019 Divorces) 6.6 Other Adjustments & New OBBBA Deductions (Tips, Overtime, Auto Loan, Senior Bonus)

7 Part 1, Chapter 7: Deductions (Standard & Itemized)

7.1 Standard Deduction by Filing Status 7.2 Medical & Dental Expenses (7.5% Floor) 7.3 State & Local Taxes (SALT $40K Cap) 7.4 Mortgage Interest Deduction 7.5 Charitable Contributions 7.6 Casualty & Theft Losses 7.7 QBI Deduction (Section 199A)

8 Part 1, Chapter 8: Tax Calculation & Credits

8.1 Tax Tables & Rate Schedules 8.2 Alternative Minimum Tax (AMT) 8.3 Self-Employment Tax Calculation 8.4 Child Tax Credit & Additional CTC 8.5 Earned Income Tax Credit (EITC) 8.6 Education Credits (AOC & LLC) 8.7 Child & Dependent Care Credit 8.8 Other Credits (Saver's, Premium Tax)

9 Part 1, Chapter 9: Retirement Accounts & Social Security

9.1 Traditional vs. Roth IRA 9.2 401(k), 403(b) & TSP Basics 9.3 SEP-IRA & SIMPLE IRA 9.4 Required Minimum Distributions (RMDs) 9.5 Early Withdrawal Penalties & Exceptions 9.6 Social Security Taxation

10 Part 1, Chapter 10: Specialized Individual Returns

10.1 Estate Tax (Form 706) 10.2 Gift Tax (Form 709) 10.3 Foreign Income (Form 2555) 10.4 FBAR & FATCA Reporting 10.5 Farm Income (Schedule F) 10.6 Disaster Area Rules

11 Part 2, Chapter 11: Business Entity Types

11.1 Overview of Entity Types 11.2 State Law vs. Tax Classification 11.3 Entity Selection: Reasonable Comp & QBI 11.4 Form 8832 & Rev. Proc. 2009-41 11.5 LLC Deep Dive: Spouses & EINs 11.6 Changing Status: The 60-Month Rule

12 Part 2, Chapter 12: Starting a Business

12.1 Hobby vs. Business (Profit Motive) 12.2 Employer Identification Number (EIN) 12.3 Tax Year Selection 12.4 Recordkeeping Requirements 12.5 Statute of Limitations 12.6 Related Party Transactions 12.7 Start-Up Costs, Entity Choice & OBBBA Business Changes (2025)

13 Part 2, Chapter 13: Worker Classification & Payroll

13.1 Employee vs. Independent Contractor 13.2 Common Law Test (Behavioral, Financial, Relationship) 13.3 Statutory Employees & Non-Employees 13.4 Form 941 & Payroll Deposits 13.5 Trust Fund Recovery Penalty 13.6 FUTA & Unemployment Taxes

14 Part 2, Chapter 14: Accounting Methods & Income

14.1 Cash vs. Accrual Method 14.2 Hybrid Methods & Changes 14.3 Inventory & COGS 14.4 Gross Receipts & Income Recognition 14.5 Constructive Receipt 14.6 Form 1099 Reporting Requirements 14.7 §163(j) Business Interest Expense Limitation 14.8 §174 Research & Experimental Expenditures

15 Part 2, Chapter 15: Depreciation & Asset Treatment

15.1 MACRS Basics & Recovery Periods 15.2 Mid-Month, Mid-Quarter, Half-Year Conventions 15.3 Section 179 Expense Deduction 15.4 Bonus Depreciation 15.5 Listed Property Rules 15.6 Amortization of Intangibles 15.7 Depletion 15.8 Disposition of Business Assets

16 Part 2, Chapter 16: Business Deductions

16.1 Ordinary & Necessary Test 16.2 Business Travel Expenses 16.3 Business Meals (50% Limitation) 16.4 Business Use of Vehicle 16.5 Home Office Deduction 16.6 Business Interest Limitation (163(j)) 16.7 Business Bad Debts

17 Part 2, Chapter 17: Business Credits & Fringe Benefits

17.1 General Business Credit Overview 17.2 R&D Credit & Disabled Access Credit 17.3 Small Employer Health Insurance Credit 17.4 Fringe Benefit Rules 17.5 Cafeteria Plans (Section 125) 17.6 Achievement Awards & Other Benefits

18 Part 2, Chapter 18: Sole Proprietorships

18.1 Schedule C Overview 18.2 Calculating Net Profit/Loss 18.3 Self-Employment Tax (Schedule SE) 18.4 Estimated Tax Payments 18.5 Hobby Loss Rules

19 Part 2, Chapter 19: Partnerships

19.1 Partnership Formation 19.2 Partner's Basis Calculation 19.3 Form 1065 Overview 19.4 Schedule K-1 (Partner's Share) 19.5 Guaranteed Payments 19.6 Partnership Distributions 19.7 At-Risk & Passive Activity Rules 19.8 Partnership Termination & Liquidation

20 Part 2, Chapter 20: C Corporations

20.1 Form 1120 Overview 20.2 Corporate Tax Rate (21%) & CAMT 20.3 Accumulated Earnings Tax 20.4 Dividends Received Deduction 20.5 Earnings & Profits (E&P) 20.6 Corporate Distributions, Dividends & Stock Redemptions 20.7 §351 Transfers, §1032, §1202 QSBS & Other Corporate Provisions 20.8 Corporate Liquidation

21 Part 2, Chapter 21: S Corporations

21.1 S Election Requirements (Form 2553) 21.2 Form 1120-S Overview 21.3 Shareholder Basis Calculation 21.4 Reasonable Compensation 21.5 S Corporation Distributions 21.6 Built-In Gains Tax & Termination

22 Part 2, Chapter 22: Specialized Business Returns

22.1 Trusts & Estates (Form 1041) 22.2 Simple vs. Complex Trusts 22.3 Distributable Net Income (DNI) 22.4 Tax-Exempt Organizations (Form 990) 22.5 Retirement Plans (Form 5500) 22.6 Qualified Retirement Plans Overview 22.7 Farm Taxation 22.8 Rental Real Estate Activities

23 Part 3, Chapter 23: Practice Before the IRS

23.1 What is Practice Before the IRS? 23.2 Who Can Practice (Full Rights) 23.3 Limited Practice Rights (AFSP, Unenrolled) 23.4 Special Relationships (Family, Employees) 23.5 PTIN Requirements 23.6 Circular 230 Overview 23.7 Office of Professional Responsibility (OPR)

24 Part 3, Chapter 24: Becoming & Maintaining EA Status

24.1 Two Paths to EA (Exam vs. IRS Experience) 24.2 Application Process (Form 23) 24.3 Background & Compliance Checks 24.4 Renewal Requirements (Form 8554) 24.5 Continuing Education Requirements 24.6 Inactive Status & Termination

25 Part 3, Chapter 25: Practitioner Duties (Circular 230)

25.1 Due Diligence Requirements 25.2 Knowledge of Client's Omission 25.3 Conflict of Interest Rules 25.4 Fee Requirements (Contingent, Unconscionable) 25.5 Advertising & Solicitation Rules 25.6 Tax Return Position Standards 25.7 Written Advice Standards 25.8 Sanctions & Penalties for Violations

26 Part 3, Chapter 26: Power of Attorney & Authorization

26.1 Form 2848 (Power of Attorney) 26.2 CAF (Centralized Authorization File) 26.3 Form 8821 (Tax Information Authorization) 26.4 Third-Party Designee 26.5 Signing Returns for Taxpayers 26.6 Client Confidentiality & Privilege 26.7 Representing Clients in Audits (Examination) 26.8 Appealing IRS Decisions 26.9 Collection Representation

27 Part 3, Chapter 27: Legal Authority & Research

27.1 Hierarchy of Tax Authority 27.2 Internal Revenue Code 27.3 Treasury Regulations 27.4 Revenue Rulings & Procedures 27.5 Court Cases & Precedent 27.6 Statutes of Limitations

28 Part 3, Chapter 28: Specific Representation Issues

28.1 Trust Fund Recovery Penalty (TFRP) 28.2 Innocent Spouse Relief (Form 8857) 28.3 Injured Spouse Allocation (Form 8379) 28.4 Penalty Abatement (FTA & Reasonable Cause) 28.5 Taxpayer Advocate Service (TAS) 28.6 Freedom of Information Act (FOIA)

29 Part 3, Chapter 29: Final Review & Exam Strategy

29.1 Exam Structure & Logistics (2026-2027) 29.2 The "Clock" of Representation (Master Deadlines) 29.3 Ethics vs. Law (Sanctions & Penalties) 29.4 Final Mock Review & Exam Strategy

30 Part 3, Chapter 30: Filing Process & E-File

30.1 E-File Requirements (The "More Than 10 Returns" Rule) 30.2 ERO Responsibilities 30.3 EFIN & Application Process 30.4 Form 8879 (Signature Authorization) 30.5 Record Retention & Data Security (WISP) 30.6 Preparer Penalties (Filing Specific)

2.6 Qualifying Relative Test (4 Tests)

Key Takeaways Explain This Topic AI

A qualifying relative must pass 4 tests: Support, Income, Not a Qualifying Child, and relationship/household (remember SING)

2025 Gross Income Test: The person's gross income must be less than $5,200 (up from $5,050 in 2024) - tax-exempt income like nontaxable Social Security does NOT count

Support Test: The taxpayer must provide MORE THAN 50% of the person's total support, including food, lodging (fair rental value), clothing, medical care, education, and transportation

Multiple Support Agreement (Form 2120): When no single person provides over 50% but a group does, one person who contributed at least 10% can claim the dependent

Unlike a qualifying child, a qualifying relative has NO age limit but DOES have a gross income limit ($5,200 for 2025)

Last updated: October 2026

A qualifying relative is one of two types of dependents you can claim on your tax return (the other being a qualifying child). The qualifying relative rules allow taxpayers to claim elderly parents, adult children who no longer meet the qualifying child tests, and other relatives they support financially.

To claim someone as a qualifying relative, the person must pass four tests . Use the memory device SING to remember them:

S - Support Test
I - Income (Gross Income) Test
N - Not a Qualifying Child Test
G - Relationship or Member of Household Test (Group)

Important: In addition to these four tests, the person must also meet the joint return test (cannot file a joint return, except solely to claim a refund) and the citizenship test (must be a U.S. citizen, U.S. resident alien, U.S. national, or resident of Canada or Mexico).

Test 1: Support Test

The support test requires that the taxpayer provide more than 50% of the person's total support for the calendar year.

What Counts as Support

Support includes amounts spent to provide:

Category Examples
Food Groceries, restaurant meals
Lodging Rent payments, or fair rental value if living in taxpayer's home
Clothing Purchases of clothing and shoes
Education Tuition, books, school supplies
Medical and Dental Care Doctor visits, prescriptions, health insurance premiums
Recreation Entertainment, hobbies, vacations
Transportation Car payments, gas, insurance, public transit
Other Necessities Personal care items, utilities
Fair Rental Value for Lodging

If you provide someone lodging in your home, the support you provide equals the fair rental value (FRV) of the room or space they occupy. Fair rental value includes:

What the room would rent for on the open market
A reasonable allowance for furniture and appliances
A portion of utilities (heat, electricity, water)

Example: Your mother lives in a bedroom in your house. A similar room in your area would rent for $800/month. You provide $9,600/year ($800 x 12) in lodging support, even though you don't actually write a rent check.

What Does NOT Count as Support

The following items are not included in the support calculation:

Federal, state, and local income taxes paid by the person
Social Security and Medicare taxes (FICA)
Life insurance premiums
Funeral expenses
Scholarships received by the person
Calculating the Support Percentage

To determine if you provided more than 50% of support:

Add up total support the person received from ALL sources (including their own funds)
Add up the support YOU provided
Divide your support by total support

Example: You support your elderly father. His total support for 2024 was $24,000:

You paid: $15,000 (lodging FRV, food, medical)
His Social Security used for support: $9,000

Your support percentage: $15,000 / $24,000 = 62.5% - You pass the support test.

Multiple Support Agreement (Form 2120)

When no single person provides more than 50% of support, but two or more people together provide more than 50%, one of them may be able to claim the dependent using a Multiple Support Agreement .

Requirements for Form 2120
No one person provided more than 50% of support
Two or more people together provided more than 50% of support
Each person who contributed would be able to claim the dependent except for the support test
The person claiming the dependent must have provided at least 10% of support
All others who contributed more than 10% must sign statements waiving their right to claim the dependent
How It Works

Example: Three siblings support their mother. Her total support is $30,000.

Sarah: $10,000 (33%)
Michael: $8,000 (27%)
Jennifer: $6,000 (20%)
Mother's own funds: $6,000 (20%)

No one provides more than 50%, but the three siblings together provide 80% ($24,000). Any sibling who contributed at least 10% can claim the mother if the others sign Form 2120 waiving their right.

If Sarah claims the dependent:

Sarah attaches Form 2120 to her return
Michael and Jennifer each sign statements waiving their right for 2025
Sarah gets to claim the dependent on her return
Form 2120 Statement Requirements

Each person waiving their right must provide a signed statement including:

Their waiver of the right to claim the dependency
The calendar year the waiver applies to
The name of the qualifying relative being supported
Their name, address, and Social Security number
Test 2: Gross Income Test

For 2025, the person's gross income must be less than $5,200 .

What Counts as Gross Income

Gross income includes all income that is NOT exempt from tax:

Counts as Gross Income Does NOT Count
Wages and salaries Nontaxable Social Security benefits
Taxable interest Tax-exempt municipal bond interest
Ordinary dividends Supplemental Security Income (SSI)
Taxable Social Security benefits Veterans' benefits
Rental income (gross receipts) Welfare benefits
Business income (gross receipts) Workers' compensation
Unemployment compensation Nontaxable scholarships
Gross Income vs. Net Income

For self-employment and rental activities, gross income means gross receipts - NOT net profit. However, the gross income test for qualifying relatives uses net self-employment income in many contexts. Check IRS Publication 501 for the specific activity.

Taxable vs. Nontaxable Social Security

This is a critical distinction for the EA exam:

If Social Security is nontaxable (below the threshold for taxation), it does NOT count toward the $5,200 gross income limit

If Social Security is taxable (some portion included in income), the taxable portion counts

Example: Your aunt receives $18,000 in Social Security benefits. Based on her provisional income, only $4,000 is taxable. Her only other income is $800 in bank interest. Her gross income for the qualifying relative test is:

Taxable Social Security: $4,000
Bank interest: $800
Total gross income: $4,800 (under $5,200 - she passes!)
Test 3: Not a Qualifying Child Test

The person cannot be the qualifying child of you or any other taxpayer.

Why This Test Exists

This test prevents "double claiming." A person who qualifies as someone's qualifying child under those rules cannot also be claimed as a qualifying relative by a different taxpayer.

Example: Your 20-year-old niece lives with her parents (your sister's family) and is her parents' qualifying child. Even if you provide significant financial support, you cannot claim her as your qualifying relative because she is someone else's qualifying child.

Key Point for the Exam

If a person meets ALL the qualifying child tests for ANY taxpayer, that person cannot be anyone's qualifying relative - even if no one actually claims them as a qualifying child.

Test 4: Relationship or Member of Household Test

The person must either :

Be related to you in one of the ways listed by the IRS, OR
Live with you all year as a member of your household
Relatives Who Do NOT Need to Live with You

These relatives qualify without living in your home:

Direct Line Collateral Line In-Laws
Your child, stepchild, or foster child Your brother, sister, half-brother, half-sister Father-in-law
Your grandchild, great-grandchild Your stepbrother or stepsister Mother-in-law
Your parent or stepparent Your aunt or uncle (by blood) Son-in-law
Your grandparent, great-grandparent Your niece or nephew (by blood) Daughter-in-law
Brother-in-law, sister-in-law

Note: Aunts, uncles, nieces, and nephews must be related by blood to qualify without living with you. Aunts or uncles by marriage must live with you.

Non-Relatives Must Live with You

If someone is not on the list above , they must live with you for the entire year as a member of your household to qualify.

Examples of non-relatives who could qualify (if they live with you all year):

Your boyfriend or girlfriend
A friend you support
Your cousin (cousins are NOT on the relatives list!)
A foster parent
Relationship Cannot Violate Local Law

The relationship between you and the person living in your household cannot violate local law . For example, if you are married and a state has laws against cohabitation with someone other than your spouse, that person may not qualify.

In-Law Relationships Survive Death or Divorce

Important: A relationship established by marriage (in-laws) is not ended by death or divorce. Your former mother-in-law remains your mother-in-law for dependency purposes even after your spouse dies or you divorce.

Qualifying Child vs. Qualifying Relative: Comparison Table

Test Qualifying Child Qualifying Relative

Relationship Child, stepchild, foster child, sibling, or their descendants Much broader - includes parents, grandparents, aunts, uncles, in-laws, or anyone living with you

Age Under 19, OR under 24 if full-time student, OR permanently disabled No age limit

Residency Must live with taxpayer for more than half the year Related persons: no residency requirement; Non-relatives: entire year

Support Child did NOT provide more than 50% of own support Taxpayer provided more than 50% of support
Gross Income No income limit Must be less than $5,200 (2025)

Joint Return Cannot file joint return (except for refund only) Cannot file joint return (except for refund only)

Key Differences to Remember

Age Test: Only qualifying children have an age test. A qualifying relative can be any age.

Income Test: Only qualifying relatives have a gross income limit ($5,200). Qualifying children have no income limit.

Support Direction: For qualifying children, the child must NOT provide more than half of their own support. For qualifying relatives, the taxpayer must provide more than half.

Residency: Qualifying children need more than half the year. Qualifying relatives either need the whole year (non-relatives) or no residency at all (listed relatives).

Tax Benefits for Qualifying Relatives

When you claim a qualifying relative as a dependent, you may be entitled to:

Benefit Amount/Eligibility
Credit for Other Dependents Up to $500 nonrefundable credit
Head of Household May qualify if dependent is related (additional rules apply)
Medical Expense Deduction Include their medical expenses with yours
Dependent Care Credit Only if dependent is physically or mentally incapable of self-care

Note: Qualifying relatives do NOT qualify you for the Child Tax Credit (up to $2,200 for 2025) or the earned income-related portion of EITC. Those require a qualifying child.

Exam Tips
Know the $5,200 threshold for 2025 - The gross income limit is a frequent exam topic

Nontaxable income doesn't count - Nontaxable Social Security, SSI, and veterans' benefits are excluded from gross income

Support includes fair rental value - Don't forget to calculate FRV for lodging

Form 2120 requires 10% minimum - To claim under a multiple support agreement, you must have provided at least 10%

Cousins are NOT listed relatives - Cousins must live with you all year to qualify
In-law relationships continue - Death or divorce doesn't end the in-law relationship
No age limit for qualifying relatives - Unlike qualifying children, age is irrelevant