Yes, you may claim your daughter as a dependent and also claim the child tax credit, provided certain conditions are met.
Claiming Your Daughter as a Dependent
To claim your daughter as a dependent, she must meet the criteria for a "qualifying child" as defined in the Internal Revenue Code and IRS publications. According to the retrieved information:
- Qualifying Child Criteria:
- Relationship Test: Your daughter is your biological child, which satisfies the relationship requirement.
- Age Test: Your daughter, being born on December 31, is under the age of 19 at the end of the year.
- Residency Test: There are exceptions for children born during the year. Your daughter is considered to have lived with you for more than half the year if she was born during the year.
- Support Test: Your daughter must not have provided more than half of her own support for the year. Given that she was born on December 31, it is highly unlikely she provided any support for herself.
- Joint Return Test: Your daughter cannot file a joint return for the year, which is not applicable in this case as she is a newborn.
- Proof of Live Birth: There must be proof of a live birth shown by an official document, such as a birth certificate, and state or local law must treat the child as having been born alive.
Claiming the Child Tax Credit
To claim the child tax credit, your daughter must meet additional criteria:
- Qualifying Child for Child Tax Credit:
- Age Requirement: Your daughter must be under age 17 at the end of the year, which she is.
- Dependent Requirement: Your daughter must be claimed as a dependent on your tax return.
- Residency Requirement: Your daughter must have lived with you for more than half of the year, with exceptions for children born during the year.
- Support Requirement: Your daughter must not have provided more than half of her own support.
- Identification Requirement: You must include your daughter's name and taxpayer identification number (SSN) on your tax return. The SSN must be issued on or before the due date for filing the return.
Conclusion
Given that your daughter was born on December 31, you can claim her as a dependent if you have proof of live birth and she meets the qualifying child criteria. Additionally, you can claim the child tax credit for her, provided you include her SSN on your tax return and meet all other requirements.
Sources:
§ 152. Dependent defined
Publication 501 (2023)
§ 24. Child tax credit
Publication 17 (2023)
Publication 3 (2023)
