Yes, as long as her income was less than $4050, for the year.
A person can still be a Qualifying relative dependent, if not a Qualifying Child, if he meets the 6 tests for claiming a dependent:
1. Closely Related (a sister-in-law qualifies) OR live with the taxpayer ALL year
2. His/her gross taxable income for the year must be less than $4,050 (2016-17)
3. The taxpayer must have provided more than 1/2 his support
4. He must be a US citizen or resident of the US, Canada or Mexico
5. He must not file a joint return with his spouse or be claiming a dependent of his own
6. He must not be the qualifying child of another taxpayer
Food stamps don't count as income, for the income test, but does count as support not provided by you, for the support
test.
If no one person (or married couple) provides
50% of the support (for example her mother supported her for part of the year), then a
"multiple support agreement” (IRS Form 2120) can be used, to allow you to
claim the dependent. https://www.irs.gov/pub/irs-pdf/f2120.pdf
The IRS has a worksheet that
can be used to help with the support calculation. See: http://apps.irs.gov/app/vita/content/globalmedia/teacher/worksheet_for_determining_support_4012.pdf The support
value of a home is the fair market rental value, divided by the number of
occupants.
