Who is entitled to claim Amy as a dependent based on the information provided?

The correct answer is that Mary can sign Form 8332 to allow Ralph to claim Amy as a dependent. This option reflects the IRS provisions regarding dependency exemptions and custodial arrangements.

In situations where parents of a dependent child are divorced or separated, the custodial parent (in this case, Mary) typically has the right to claim the dependent unless they relinquish that right. By signing Form 8332, Mary gives Ralph permission to claim Amy as a dependent on his tax return. This form serves as a formal declaration, ensuring that both parties understand the arrangement, and it can be submitted to the IRS if questioned.

This allows Ralph to benefit from any potential tax benefits associated with claiming a child as a dependent, particularly if Mary does not need to claim that exemption for any specific reason, such as qualifying for certain tax credits herself. Overall, this process helps clarify and simplify the dependency claim between separated or divorced parents.