Dependency gross income test - unemployment comp

[Ron H]

Gross income test with unemployment compensation

Taxpayer’s 24 year old son had accident and son only received unemployment compensation. The total unemployment compensation was over the $3,650 but with the new $2,400 nontaxable part under the $3,650. Would the gross income test for qualified relative be satisfied?

[kcjenkins]

The test is 'gross income' not 'taxable income'. So yes, the whole amount would count, so he had enough income to be over the limit.

[jainen]

>>The test is 'gross income' not 'taxable income'.<<

In my opinion, gross income is the same as Adjusted Gross Income without the adjustments. The chart on page 3 of Pub 501 at My link defines it this way. "Gross income means all income you received in the form of money, goods, property, and services that is not exempt from tax." It then gives an example of only counting the taxable part of Social Security. The same sentence is repeated on page 17 in the exact context of qualifying relative, with reference to "all taxable unemployment insurance."

[TAXBILLY]

Agree with j on this one.

taxbilly

[Ron H]

>>The test is 'gross income' not 'taxable income'.<<

In my opinion, gross income is the same as Adjusted Gross Income without the adjustments. The chart on page 3 of Pub 501 at My link defines it this way. "Gross income means all income you received in the form of money, goods, property, and services that is not exempt from tax." It then gives an example of only counting the taxable part of Social Security. The same sentence is repeated on page 17 in the exact context of qualifying relative, with reference to "all taxable unemployment insurance."

Thanks a bunch! I appreciate the definitive answer. It will save my client a few bucks.