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Glossary Adjusted gross income. Gross in- come (defined later) minus adjust- ments to income (defined next). Adjustments to income. Deductions that are subtracted from gross income in figuring adjusted gross income. They include deductions for moving expenses, a penalty on early with- drawal of savings, and contributions to an individual retirement arrangement (IRA). Adjustments to income can be taken even if itemized deductions (de- fined later) aren’t claimed. Alternative minimum tax (AMT). A tax designed to collect at least a mini- mum amount of tax from taxpayers who benefit from the tax laws that give special treatment to certain kinds of in- come and allow deductions and credits for certain kinds of expenses. Capital gain distribution. An alloca- ted amount paid to, or treated as paid to, a shareholder by a mutual fund, regulated investment company, or real estate investment trust from its net re- alized long-term capital gains. This amount is in addition to any ordinary dividend paid to the shareholder. You will receive a statement from the payer if this applies to you. Dependent. A person, other than the taxpayer or the taxpayer's spouse, you can claim on your return. To be your dependent, a person must be your qualifying child or qualifying relative (both defined later). For more informa- tion, see Dependents in Pub. 501. Earned income. Salaries, wages, tips, professional fees, and other amounts received as pay for work ac- tually performed. For purposes of determining a de- pendent's standard deduction, earned income also includes any part of a scholarship or fellowship grant that the dependent must include in his or her gross income. For purposes of completing Form 8615, earned income also includes a taxable distribution from a qualified dis- ability trust. It doesn’t include unearned income as defined earlier under Line 1 (Unearned Income). Exemption. The deduction for per- sonal exemptions is suspended (equal to $0) for tax years 2018 through 2025. Although you can't claim a deduction for exemptions, your eligibility to claim an exemption for a child or qualifying relative remains important to determine your eligibility to claim the child tax credit, the additional child tax credit, and the credit for other dependents, as well as other tax benefits. Full-time student. A full-time student is a child who during some part of each of any 5 calendar months of the year was enrolled as a full-time student at a school, or took a full-time on-farm train- ing course given by a school or a state, county, or local government agency. A school includes a technical, trade, or mechanical school. It doesn’t include an on-the-job training course, corre- spondence school, or school offering courses only through the Internet. Gross income. All income from all sources that isn’t exempt from tax and must be included on your tax return. Gross income is the total of your earned and unearned income. For purposes of determining whether you must file a return, gross income includes gain from the sale of your main home (even if you can ex- clude part or all of it) and includes in- come earned outside the United States (even if you can exclude part or all of it). Itemized deductions. Deductions al- lowed on Schedule A (Form 1040) for medical and dental expenses, taxes, home mortgage interest and invest- ment interest, charitable contributions, and casualty and theft losses. They are subtracted from adjusted gross income in figuring taxable income. Itemized de- ductions can’t be claimed if the stand- ard deduction is chosen. For tax years 2018 through 2025, miscellaneous itemized deductions are suspended and not deductible. CAUTION ! Net capital gain. The excess of net long-term capital gain over any net short-term capital loss. For 2021, this is the smaller of the gain on line 15 or the gain on line 16 of Schedule D (Form 1040). If Schedule D (Form 1040) isn’t required, net capital gain is the amount of capital gain distributions on Form 1040, 1040-SR, or 1040-NR, line 7. Net unearned income. The total of all unearned income (other than tax-exempt income) reduced by the sum of: 1. Any adjustments to income (de- fined earlier) that are related to the unearned income, plus 2. $2,200. Qualified dividends. Dividends eligi- ble for the lower tax rates that apply to a net capital gain. They are reported to you in box 1b of Form 1099-DIV. You report them on Form 1040, 1040-SR, or 1040-NR, line 3a. For more informa- tion, see Pub. 550. Qualifying child. To be your depend- ent (defined earlier), a person must be either your qualifying child or your qual- ifying relative (defined next). Generally, a person is your qualifying child if that person: • Is your child, stepchild, foster child, brother, sister, stepbrother, step- sister, or a descendant of any of them; • Lived with you for more than half of the year; • Didn’t provide more than half of his or her own support for the year; • Was under age 19 at the end of the year and younger than you (or your spouse if filing jointly) (or was un- der age 24 at the end of the year, a student, and younger than you (or your spouse if filing jointly), or was any age and permanently and to- tally disabled); and • Didn’t file a joint return with his or her spouse. Publication 929 (2021) Page 23