What Is a Dependency Exemption?
In addition to the Personal Exemptions for you and your spouse, the IRS allows you to substract an equivalent exemption amount from your taxable income for each of the individuals you can qualify as a dependent. For 2011, the exemption amount is $3,700.
The dependency exemption can be claimed for a qualifying child or relative whether or not they file an individual return.
However, you cannot be claimed as a dependent if you yourself are married filing jointly and either you or your spouse is already claimed as a dependent by another taxpayer.
Furthermore, you cannot claim a married person as a dependent, such as for example your daughter or son, if she or he is already filing a joint return unless this return entails a refund.
Finally, to be claimed as a dependent that person must be a US citizen, resident alien, US national, or a resident of Canada or Mexico.