Who may claim Katie as a qualifying child?

Katie can be claimed as a qualifying child by both Bob and Judy if they meet the necessary criteria laid out by the IRS for dependency exemptions. To qualify as a qualifying child, Katie must meet the relationship, age, residency, and support tests outlined by the IRS.

For Bob and Judy to both claim Katie, they would need to be her parents or guardians, and she must be under a certain age or a full-time student. Additionally, Katie must have lived with them for more than half of the year, and they each need to have provided over half of her financial support.

If both Bob and Judy fulfill these requirements, they can each claim Katie, allowing them to benefit from tax deductions and credits associated with having a qualifying child. It’s important that there’s no competition for the same tax benefits; typically, only one person can claim a child for tax purposes unless other specific circumstances apply, such as shared custody or tax agreements. Nevertheless, if both are eligible and choose to claim her, they may do so, resulting in the correct answer being that both can claim Katie.