An individual receiving $5,000 of tax-exempt income during the year could qualify as a qualifying child of another taxpayer but could not qualify as a qualifying relative of another taxpayer.

Question

Quizplus · Accepted Answer

The test for a qualifying relative does not include an income limit related to tax-exempt income. The income test for a qualifying relative generally considers gross income that must be less than the annual exemption amount, but tax-exempt income is not included in this calculation.

An Individual Receiving $5,000 of Tax-Exempt Income During the Year