“The new code 152 definition of dependent borrows many of the old rules, but reorganizes them and adds several significant new requirements. Under the new definition of dependent, an individual can be considered a dependent of the taxpayer if he or she is either a ‘qualifying child’ or a ‘qualifying relative’… In order to be treated as a ‘qualifying relative,’ none of those individuals (qualifying relatives) may earn more than the ‘exemption amount’ [$3,200 for 2005] that would otherwise enable the taxpayer to take a dependent exemption deduction with respect to the individual on his or her tax return. This is a new requirement for dependent treatment.”

Glaser, D.M. (2004). Re-defining “dependent”: Unexpected impact on benefit plans.New York Law Journal, December.