Which type of income is considered in the support test?

The support test is used in determining whether a taxpayer can claim a dependent. In this context, the test evaluates all forms of income contributed to the support of a dependent. To accurately gauge the level of support provided, both taxable and nontaxable incomes are taken into account.

Taxable income includes wages, salaries, and interest income that are subject to income tax. Nontaxable income may also play a crucial role; for instance, social security benefits or gifts can be considered in determining if the support threshold is met. Thus, including both types of income allows for a complete assessment of the financial support provided to the dependent.

By assessing both taxable and nontaxable income, the IRS ensures that all resources used for support are recognized, leading to a fair evaluation of the taxpayer's ability to claim a dependent. This holistic approach is vital for accurately applying the support test in tax situations.