A new baby in the family is a blessed event, but when it comes to claiming your new baby as a dependent on your taxes, as with comedy, timing is everything. The Internal Revenue Service considers dependents on an annual basis, from Jan. 1 though Dec. 31. It doesn't matter when during the year your baby was born; you can claim the child as a dependent beginning with that year's taxes.
Current Tax Year
Exemptions allow you to reduce the amount of your taxable income. You can typically claim one exemption for yourself, another exemption for your spouse if you are married and file a joint return, and one exemption for each of your dependents. If your baby qualifies as your dependent you can claim the child on your taxes for that year, but not for the previous tax year. For example, if your baby is born on Jan. 1, 2013, you can claim the child on your 2013 tax return, but you cannot claim her on your 2012 tax return, even if the child was born before you filed your 2012 taxes.
Social Security Number
If you want to claim an exemption for your new baby, you must get a Social Security number for the child. If you don't include your new baby's Social Security number, or if you record it incorrectly, the Internal Revenue Service might not allow the exemption. You can request a Social Security number by filing Form SS-5 with your local Social Security Administration office.
Your new baby must be your dependent before you can claim an exemption for the child on your tax return. The IRS uses five tests to determine dependency for a child. Some of these tests are not really relevant to newborns. For example, your dependent child can't file a joint return, cannot have provided more than half of her support and must be under 19 years of age. Others are more relevant. For example, your new baby must be your son or daughter, foster child, adopted child, sibling or a descendant, such as a grandchild. Your baby must have lived with you for at least half of the year. This can be a sticking point if you are separated from the child's other parent. There is some leeway in the tax rules for the half-year rule. For example, a baby who was born during the second half of the year, or a baby who was born alive but died during the same year is considered to have lived with you for the entire year for tax purposes.
The amount you can exempt from your taxable income for your new baby is $3,800 as of the 2012 tax year. But exemptions are just one tax benefit of having a new baby. You might also be able to claim the child tax credit. If you qualify for the earned income tax credit, the amount of your credit might increase with the birth of a baby. You might also qualify for the child and dependent care credit to help offset the cost of caring for you little one while you are at work. If you are a single parent, you might be able to file using the more advantageous head of household filing status.
- Internal Revenue Service: Six Important Facts about Dependents and Exemptions
- Internal Revenue Service: Publication 501, Exemptions for Dependents
- TurboTax: Birth of a Child
- Nolo: Tax Breaks Every Parent Should Know About
- Dave Ramsey: New Baby
- Internal Revenue Service: In 2012, Many Tax Benefits Increase Due to Inflation Adjustments
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