A dependency exemption can be taken by taxpayers who want to reduce the amount they have to pay in income taxes. The dependency exemption exists so that the taxpayer’s burden can be reduced when their income is used to support a family or other dependents. The IRS has a few rules about who qualifies to be defined as a dependent in order to be able to take a dependency exemption on a tax return. When a taxpayer is a divorced parent, the dependency exemption that was taken for a child can only be claimed by one of the parents, usually the custodial parent with whom the child spends the majority of their time. There is an IRS form that one of the parents can sign in order to give up the right to claim this exemption on their yearly tax return in order that the other parent may take it.

Yuuki and Tomoe are married, have one child, and file with the status married, filing jointly. On their return, they are able to take one dependency exemption for their child and a personal exemption for themselves. If Yuuki and Tomoe were to file for a divorce, and Yuuki was given majority custody of their child, Tomoe would not be able to file a dependency exemption on his next tax return. Yuuki can file to give up the claim on this dependency exemption to her ex-husband by filing a form with the IRS or use it herself on her tax return.