Relationship Test

DEFINITION of 'Relationship Test'

One of several tests that a person must pass in order to be claimed as a dependent on someone else's tax return. The relationship test has several criteria, and as long as any one of them is met, the person in question is eligible to be claimed as a dependent by another. The relationship test mandates that the person in question must be either a lineal descendant or ancestor, sibling, in-law, niece, nephew, aunt, uncle or anyone other than the taxpayer's spouse who lived in the taxpayer's household during the entire year.

There is a separate relationship test to see if someone is a qualifying child (see below).

BREAKING DOWN 'Relationship Test'

The relationship test for a qualifying child mandates that the child be the taxpayer's child, stepchild, foster child, adopted child or any descendant thereof. Children who meet the criteria allow the taxpayer claiming them to receive their dependency exemptions. This test is one of four tests that a child must pass in order to be considered a qualifying child. The others are residence, age and support tests.

RELATED TERMS
  1. Dependent

    An individual whom a taxpayer can claim for credits and/or exemptions. ...
  2. Support Test

    One of five tests that must be passed in order to claim someone ...
  3. Child Tax Credit

    A credit given to taxpayers for each dependent child that is ...
  4. Citizenship Test

    One of the key criteria set forth by the IRS that a person must ...
  5. Qualifying Relative

    A federal income tax designation that allows a taxpayer to claim ...
  6. IRS Publication 972: Child Tax ...

    A document published by the Internal Revenue Service (IRS) that ...
Related Articles
  1. Budgeting

    Teaching Your Child To Be Financially Savvy

    If you start today, you can set your kids up for a lifetime of smart money management.
  2. Personal Finance

    Opening Your Child's First Bank Account

    Teach your children to save up to meet their spending - and saving - goals.
  3. Personal Finance

    Summer: Time For Teaching Your Kids About Money

    Use holiday time to teach your children about earning, saving and spending money.
  4. Budgeting

    The 5 Most Expensive States for Child Care

    To get a better sense of how child care costs can fluctuate, here's a look at the costs of child care across the country.
  5. Budgeting

    How An Allowance Helps Kids Get Money-Smart

    Discover which of these three reward techniques teaches the best lessons about money.
  6. Options & Futures

    Paying For College In An Economic Downturn

    There are many ways to fund a child's education including loans, scholarships, grants and protecting your investments.
  7. Options & Futures

    How To Teach Your Child About Investing

    Find simple and easy instructions on how to introduce your kids to the stock market.
  8. Entrepreneurship

    Should You Hire Your Kids to Work for You?

    If you own a small business, hiring your kids is a no-brainer. But there may also be reasons not to. Here are six questions to ask yourself.
  9. Retirement

    Should Each Child Get the Same Inheritance?

    The answer depends on what you've given your kids in the past, what their needs are now – and, unfortunately, how contentious they are.
  10. Credit & Loans

    Help Your Kids Understand Money

    These simple tips will help you raise financially savvy kids.
RELATED FAQS
  1. How can I use a child tax credit?

    You may be able to reduce the amount of taxes you owe by up to $4,000, by claiming the child tax credit of up to $1,000 for ... Read Answer >>
  2. How much does a dependent reduce your taxes?

    Learn the qualifications for claiming a dependent on your income taxes and the amount by which a dependent reduces your tax ... Read Answer >>
  3. Can my child have an IRA/Roth IRA?

    Explore the possibilities for establishing a traditional or Roth IRA for a minor child, and learn the necessary requirements, ... Read Answer >>
  4. What is the difference between a write-off and a deduction?

    Understand the differences between a tax write-off and a tax deduction. Learn how each one works to reduce income taxes and ... Read Answer >>
  5. What are the requirements to file a tax return as a qualifying widow?

    Learn about the qualifying widow/widower tax filing status, and how an individual qualifies for using this special tax status ... Read Answer >>
  6. What options do I have to save for my child's education?

    There are numerous options available to invest savings for a child's education: State-sponsored "529" college savings plans: ... Read Answer >>
Hot Definitions
  1. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  2. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  3. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  4. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  5. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
  6. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
Trading Center