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Support Test (To Be a Qualifying Relative) To meet this test, you generally must provide more than half of a person's total support during the calendar year. However, if two or more persons provide support, but no one person provides more than half of a person's total support, see Multiple Support Agreement, later. How to determine if support test is met. You figure whether you have provided more than half of a person's total support by compar­ ing the amount you contributed to that person's support with the entire amount of support that person received from all sources. This includes support the person provided from his or her own funds. You may find Worksheet 2 helpful in figuring whether you provided more than half of a per­ son's support. Person's own funds not used for support. A person's own funds are not support unless they are actually spent for support. Example. Your mother received $2,400 in social security benefits and $300 in interest. She paid $2,000 for lodging and $400 for recre­ ation. She put $300 in a savings account. Even though your mother received a total of $2,700 ($2,400 + $300), she spent only $2,400 ($2,000 + $400) for her own support. If you spent more than $2,400 for her support and no other support was received, you have provided more than half of her support. Child's wages used for own support. You cannot include in your contribution to your child's support any support paid for by the child with the child's own wages, even if you paid the wages. Year support is provided. The year you pro­ vide the support is the year you pay for it, even if you do so with borrowed money that you re­ pay in a later year. If you use a fiscal year to report your in­ come, you must provide more than half of the dependent's support for the calendar year in which your fiscal year begins. Armed Forces dependency allotments. The part of the allotment contributed by the govern­ ment and the part taken out of your military pay are both considered provided by you in figuring whether you provide more than half of the sup­ port. If your allotment is used to support per­ sons other than those you name, you can take the exemptions for them if they otherwise qual­ ify. Example. You are in the Armed Forces. You authorize an allotment for your widowed mother that she uses to support herself and her sister. If the allotment provides more than half of each person's support, you can take an exemp­ tion for each of them, if they otherwise qualify, even though you authorize the allotment only for your mother. Tax-exempt military quarters allowan- ces. These allowances are treated the same way as dependency allotments in figuring sup­ port. The allotment of pay and the tax­exempt basic allowance for quarters are both consid­ ered as provided by you for support. Tax-exempt income. In figuring a person's to­ tal support, include tax­exempt income, sav­ ings, and borrowed amounts used to support that person. Tax­exempt income includes cer­ tain social security benefits, welfare benefits, nontaxable life insurance proceeds, Armed Forces family allotments, nontaxable pensions, and tax­exempt interest. Example 1. You provide $4,000 toward your mother's support during the year. She has earned income of $600, nontaxable social se­ curity benefits of $4,800, and tax­exempt inter­ est of $200. She uses all these for her support. You cannot claim an exemption for your mother because the $4,000 you provide is not more than half of her total support of $9,600 ($4,000 + $600 + $4,800 + $200). Example 2. Your niece takes out a student loan of $2,500 and uses it to pay her college tui­ tion. She is personally responsible for the loan. You provide $2,000 toward her total support. You cannot claim an exemption for her because you provide less than half of her support. Social security benefits. If spouses each receive benefits that are paid by one check made out to both of them, half of the total paid is considered to be for the support of each spouse, unless they can show otherwise. If a child receives social security benefits and uses them toward his or her own support, the benefits are considered as provided by the child. Support provided by the state (welfare, food benefits, housing, etc.). Benefits provi­ ded by the state to a needy person generally are considered support provided by the state. However, payments based on the needs of the recipient will not be considered as used entirely for that person's support if it is shown that part of the payments were not used for that purpose. Foster care. Payments you receive for the support of a foster child from a child placement agency are considered support provided by the agency. See Foster care payments and expen- ses, earlier. Home for the aged. If you make a lump­sum advance payment to a home for the aged to take care of your relative for life and the pay­ ment is based on that person's life expectancy, the amount of support you provide each year is the lump­sum payment divided by the relative's life expectancy. The amount of support you pro­ vide also includes any other amounts you provi­ ded during the year. Total Support To figure if you provided more than half of a person's support, you must first determine the total support provided for that person. Total support includes amounts spent to provide food, lodging, clothing, education, medical and dental care, recreation, transportation, and sim­ ilar necessities. Generally, the amount of an item of support is the amount of the expense incurred in provid­ ing that item. For lodging, the amount of support is the fair rental value of the lodging. Expenses not directly related to any one member of a household, such as the cost of food for the household, must be divided among the members of the household. Example 1. Grace Brown, mother of Mary Miller, lives with Frank and Mary Miller and their two children. Grace gets social security benefits of $2,400, which she spends for clothing, trans­ portation, and recreation. Grace has no other income. Frank and Mary's total food expense for the household is $5,200. They pay Grace's medical and drug expenses of $1,200. The fair rental value of the lodging provided for Grace is $1,800 a year, based on the cost of similar rooming facilities. Figure Grace's total support as follows: Fair rental value of lodging . . . . . . . . . . . $ 1,800 Clothing, transportation, and recreation . . . . . . . . . . . . . . . . . . . . . . . 2,400 Medical expenses . . . . . . . . . . . . . . . . . 1,200 Share of food (1/5 of $5,200) . . . . . . . . . . 1,040 Total support . . . . . . . . . . . . . . . $6,440 The support Frank and Mary provide ($1,800 lodging + $1,200 medical expenses + $1,040 food = $4,040) is more than half of Grace's $6,440 total support. Example 2. Your parents live with you, your spouse, and your two children in a house you own. The fair rental value of your parents' share of the lodging is $2,000 a year ($1,000 each), which includes furnishings and utilities. Your fa­ ther receives a nontaxable pension of $4,200, which he spends equally between your mother and himself for items of support such as cloth­ ing, transportation, and recreation. Your total food expense for the household is $6,000. Your heat and utility bills amount to $1,200. Your mother has hospital and medical expenses of $600, which you pay during the year. Figure your parents' total support as follows: Support provided Father Mother Fair rental value of lodging . . . . $1,000 $1,000 Pension spent for their support . . . . . . . . . . . . . . . . . 2,100 2,100 Share of food (1/6 of $6,000) . . . . . . . . . . . . . . . . . 1,000 1,000 Medical expenses for mother . . . . . . . . . . . . . . . . . 600 Parents' total support . . . . $4,100 $4,700 You must apply the support test separately to each parent. You provide $2,000 ($1,000 lodging + $1,000 food) of your father's total sup­ port of $4,100 — less than half. You provide $2,600 to your mother ($1,000 lodging + $1,000 food + $600 medical) — more than half of her Page 20 Publication 501 (2014)