Under the TCJA, effective for tax years beginning after Dec. 31, 2017 and before Jan. 1, 2026, you can’t claim a dependency exemption for dependents, including qualifying relatives, but you may be eligible for a $2,000 credit for each qualifying child and a $500 credit (called the “family credit”) for each qualifying non-child dependent, including qualifying relatives.
One of the conditions for being a qualifying relative is that the person’s gross income for the year can’t be more than the exemption amount. That condition remains the same in the Tax Code, but the exemption amount has been reduced to zero because the dependency exemption has has been eliminated. The IRS has clarified that the gross income limit for a qualifying relative for tax credit purposes (as well as for other purposes, such as head-of-household status), is determined by reference to what the exemption amount would have been if it hadn’t been reduced to zero by the TCJA. Thus, after 2017 and before 2026, the gross income limit is $4,150, adjusted for inflation after 2018.