The gross income test for a qualifying relative is used to determine if a potential dependent's level of income allows them to be claimed on another taxpayer's return.

The “dependent’s” gross income must generally be less than the personal exemption amount for an individual to qualify as a dependent. As part of tax reform, the federal deduction for exemptions has been suspended for tax years 2018 through 2025.  However, the exemption amount continues to be used elsewhere in the tax code for other purposes, including for the definition of a qualified relative. The amount is subject to inflation adjustment annually.      

All gross income which is taxed counts towards this test (e.g., gross rents before expenses), but exempt amounts such as worker’s compensation or gifts are not counted. Social Security benefits are only counted to the extent they are taxable.

Gross income under this test does not include certain income from sheltered workshops for permanently and totally disabled individuals. To be excludable, the income must come from activities that are incidental to medical care during special training and it must be paid by an exempt organization or government agency.