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same is true for a child who was born during the year and lived with you as a member of your household for the rest of the year. The test is also met if a child lived with you as a member of your household except for any required hospital stay following birth. The test is also met for an adopted or foster child if you adopted the per- son in 2022, the person was lawfully placed with you for legal adoption by you in 2022, or the person was an eligible foster child placed with you during 2022 and your main home was the person’s main home for the entire time since the person was adopted or placed with you in 2022. If your dependent died during the year and you otherwise qualify to claim that person as a dependent, you can still claim that person as a dependent. Example. Your parent, who met the tests to be your qualifying relative, died on January 15. You can claim your parent as a dependent on your return. Local law violated. A person doesn't meet this test if at any time during the year the rela- tionship between you and that person violates local law. Example. Your significant other, T, lived with you as a member of your household all year. However, your relationship with T violated the laws of the state where you live because T was married to someone else. Therefore, T doesn't meet this test and you can't claim T as a dependent. Adopted child. An adopted child is always treated as your own child. The term “adopted child” includes a child who was lawfully placed with you for legal adoption. Cousin. Your cousin must live with you all year as a member of your household to meet this test. Gross Income Test To meet this test, a person's gross income for the year must be less than $4,400. Gross income defined. Gross income is all income in the form of money, property, and services that isn't exempt from tax. In a manufacturing, merchandising, or min- ing business, gross income is the total net sales minus the cost of goods sold, plus any miscella- neous income from the business. Gross receipts from rental property are gross income. Don't deduct taxes, repairs, or other expenses to determine the gross income from rental property. Gross income includes a partner's share of the gross (not net) partnership income. Gross income also includes all taxable un- employment compensation, taxable social se- curity benefits, and certain amounts received as scholarship and fellowship grants. Scholarships received by degree candidates and used for tui- tion, fees, supplies, books, and equipment re- quired for particular courses aren’t generally in- cluded in gross income. For more information about scholarships, see chapter 1 of Pub. 970. Disabled dependent working at sheltered workshop. For purposes of the gross income test, the gross income of an individual who is permanently and totally disabled at any time during the year doesn't include income for serv- ices the individual performs at a sheltered work- shop. The availability of medical care at the workshop must be the main reason for the indi- vidual's presence there. Also, the income must come solely from activities at the workshop that are incident to this medical care. A “sheltered workshop” is a school that: • Provides special instruction or training de- signed to alleviate the disability of the indi- vidual; and • Is operated by certain tax-exempt organi- zations or by a state, a U.S. possession, a political subdivision of a state or posses- sion, the United States, or the District of Columbia. Permanently and totally disabled has the same meaning here as under Qualifying Child, earlier. Support Test (To Be a Qualifying Relative) To meet this test, you must generally 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 the person’s 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 aren't support unless they are actually spent for support. Example. Your parent received $2,400 in social security benefits and $300 in interest, paid $2,000 for lodging and recreation, and put $300 in a savings account. Even though your parent received a total of $2,700 ($2,400 + $300), your parent spent only $2,400 ($2,000 + $400) for your parent’s own support. If you spent more than $2,400 for your parent’s support and no other support was re- ceived, you have provided more than half of your parent’s support. Child's wages used for own support. You can't 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 wa- ges. 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 claim them as dependents if they otherwise qualify. Example. You are in the Armed Forces. You authorize an allotment for your surviving parent that your surviving parent uses to sup- port themselves and their sibling. If the allot- ment provides more than half of each person's support, you can claim each of them as a de- pendent, if they otherwise qualify, even though you authorize the allotment only for your surviv- ing parent. 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 tax-exempt 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 tax-exempt income, sav- ings, and borrowed amounts used to support that person. Tax-exempt income includes cer- tain social security benefits, welfare benefits, nontaxable life insurance proceeds, Armed Forces family allotments, nontaxable pensions, and tax-exempt interest. Example 1. You provide $4,000 towards your parent's support during the year. Your pa- rent has earned income of $600, nontaxable so- cial security benefits of $4,800, and tax-exempt interest of $200, all of which your parent uses for self-support. You can't claim your parent as a dependent because the $4,000 you provide isn't more than half of the total support of $9,600 ($4,000 + $600 + $4,800 + $200). Example 2. K, your sibling’s child, takes out a student loan of $2,500 and uses it to pay college tuition. K is personally responsible for the loan. You provide $2,000 toward K’s total support. You can't claim K as a dependent be- cause you provide less than half of K’s 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 their 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 are gener- ally considered support provided by the state. However, payments based on the needs of the recipient won't be considered as used entirely Publication 501 (2022) Page 19