You are allowed one exemption for each person you can claim as a dependent. You can claim an exemption for a dependent even if your dependent files a return.
The term "dependent" means:
Tests to be a qualifying relative:
See IRS Publication 501 Exemptions, Standard Deduction, and Filing Information for exceptions to the qualifying relative tests.
Additional Information
For more information on qualifying children, see Rules for Claiming. For instructions on how to enter dependent information in TaxAct, see Add Dependents in Program.