As long as your child was born at any time during the tax year, regardless if it’s 11:59 p.m on the last day of the year, you can claim her as a dependent when you file your tax return. However, you’re out of luck if she waits until 12:01 a.m on January 1 - at least until you file your tax return that year. The rule is simple - your child must be born before she can qualify.
You may have heard of a rumor that children must be at least six months old before you can claim her as a dependent when filing taxes. This rumor is simply not true although there are other rules that do apply.
For claiming a qualifying child as a dependent, you must first take a look at the overall criteria involved. The first rule states that your child must live with you for more than half the year. Your New Year’s Eve baby might seem to be ruled out by this rule but there an exception for newborns according to the Internal Revenue Code. When a child dies during the year, the same exception to the rule also applies.
If your baby presumably have lived with your from the time he was born in the hospital, your baby will still meet the residency test because even a stay in the hospital is considered to be living in your home.
Of course, that changes things if the child is placed in foster care or up for adoption and leaves your care. If his other parent immediately took custody of him and you don’t also live with that parent, that’s another exception as well. A whole new batch of rules in this case applies.
The detailed criteria for who gets to claim a child as a dependent when the parents are divorced or separated are provided by the IRS. The reason why they’re called Tiebreaker Rules is that they typically come into play when the child wants to be claimed by both parents. This is not possible - only if you can do so.
Parents must step from one rung to another like stepping unto a ladder until one of them qualifies. The parent with whom the child lived most during the tax year gets to claim the child and that’s the first step or requirement. If the child was born in November and immediately went home from the hospital with her other parent because she lived with him the entire time she was alive, that parent gets to claim her.
The parent who is entitled to claim the child as a dependent in cases where the baby was born late on New Year’s Eve and it’s difficult to determine who she lived with the longest, is the parent with the highest adjusted gross income (AGI). Whoever earns more is where everything boils down too.
All the rules assume that you’re married and if you are, no matter when or what time the child was born during the tax year, you can both effectively claim the child if you file a joint return.
Under the remaining IRS rules for qualifying child dependents, your baby will also qualify as your dependent more or less by default. Your son or daughter, brother or sister, or a descendant of one of these individuals can be your dependent. If you’ve just given birth, you’ve already got this one covered.
On the last day of the tax year, the child must be younger than age 19 or age 24 if she’s a full-time student.
Finally, the financial support for the child must not come from his own money for the year. This will not be an issue unless and until child labor laws change radically.
From 2018 through 2025, most people think having a dependent doesn’t give them any kind of tax relief anymore. The new tax law passed by Congress in December 2017 called Tax Cuts and Jobs Act of 2017 has eliminated the personal exemption that used to be available for each of your dependents.
However, the Child Tax Credit, the Earned Income Tax Credit, and the Child and Dependent Care Credit as still available and to qualify for each of them, having a dependent is a critical requirement. Additionally, your dependent might help qualify you as head of household if you and your baby’s other parent aren’t living together. This is an advantageous filing status on your part.
