As legal guardians, you are entitled to the exemption for your grandchild, but only one of you can claim it. Decide who should do this; it depends on who will save more in taxes for the family. You do not apportion the exemption between you.
A 12-month period ending on the last day of any month other than December. Partnerships, S corporations, and personal service corporations are limited in their choice of fiscal years and face special restrictions.