Gross-Income Test

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DEFINITION of 'Gross-Income Test'

One of the five necessary tests that dependents must pass before they can be claimed as such in the U.S. The gross-income test mandates that dependents cannot earn more than a certain amount each year. This test only applies to potential dependents that are over the age of 18 (or 23 if he or she is a full-time student).

BREAKING DOWN 'Gross-Income Test'

The amount that a potential dependent can earn is indexed for inflation each year. For 2008, the limit was $3,500, equal to the dependency exemption amount. If this criterion is met, the other four tests for dependency are then applied.

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RELATED FAQS
  1. What is the difference between comprehensive income and gross income?

    Comprehensive income and gross income are similar, but comprehensive income is a specific term used on a company's financial ... Read Full Answer >>
  2. What tax breaks are afforded to a qualifying widow?

    The tax breaks accorded to qualifying widows or widowers include being able to use a tax filing status that allows for a ... Read Full Answer >>
  3. How is income taxed on prorated salary?

    Since yearly income is viewed by the Internal Revenue Service (IRS) as the total amount of income a person has made over ... Read Full Answer >>
  4. How can I tell which of my business expenses count as write-offs?

    Any basic, reasonably necessary expenses incurred in running a business can be considered possible write-offs. Such expenses ... Read Full Answer >>
  5. What is the difference between a write-off and a deduction?

    There is no difference between a tax write-off and a tax deduction. It's possible that the confusion arises between a tax ... Read Full Answer >>
  6. What is the difference between taxable income and gross income?

    Gross income includes all of the income a person receives during a year that is not explicitly exempt from taxation, whereas ... Read Full Answer >>

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