A multiple support agreement allows what regarding dependent claims?

A multiple support agreement allows a group of individuals, typically relatives, to agree among themselves as to which one of them will claim a qualifying dependent on their tax returns. This setup is particularly useful in situations where no single taxpayer provides more than half of the support for the dependent, yet multiple people together may provide enough support collectively.

The correct option highlights this flexibility in claiming the dependent, underscoring that as long as the group meets specific criteria regarding support and dependency, they can come to a mutual agreement about who will take the tax benefits associated with claiming that dependent. This can provide strategic tax advantages for the individuals involved, ensuring that the dependent status is utilized effectively among those who contribute to the dependent's support.

Contextually, the other options do not reflect the nuances of the multiple support agreement. For example, stating that only one person can claim the dependent does not recognize the collaborative aspect of multiple support agreements. Similarly, saying all taxpayers must list the dependent on their returns or that each relative can claim a different dependent fails to acknowledge the essential premise of the agreement, which revolves around a designated claimant rather than multiple simultaneous claims.