Whether or not you can claim a newborn baby on your 2012 tax return depends on the baby’s date and time of birth. If the new arrival is born at 11:59 p.m. on December 31, you can claim her as a dependent for the 2012 calendar year. But, if she arrives a minute later, you’ll have to wait until next year to claim the infant on your 2013 tax return.
Requirements for Claiming a Newborn
Except for the residency requirement, the requirements for claiming a newborn are similar to other dependency requirements. Normally, a dependent would need to have resided with the taxpayer for at least six months during the year. Since newborns can be claimed for the entire calendar year even if they are born on December 31, the six-month residency requirement doesn't apply. However, the relationship and financial support requirement still apply. A newborn must be a son, daughter, sibling, stepbrother or stepsister, foster or adopted child, stepchild or a descendant of one of these, which includes nieces and nephews. The taxpayer must also have provided more than half of the financial support for the newborn.
Applying for a Social Security Number
A newborn must have a Social Security number before you can claim him or her on your tax return, so it is a good idea to apply for the newborn’s Social Security number as soon as possible after the child’s birth. To apply for a newborn’s Social Security number, parents can complete Form SS-5, which is available on the Social Security Administration’s website, at local Social Security offices and even at some hospitals. To prevent delays in processing the application, the SSA recommends that parents initiate the process at the hospital when applying for the child’s birth certificate. Parents will also need to provide their Social Security numbers on Form SS-5.
You may be eligible for a few additional tax credits and benefits by claiming your newborn on your tax return. To claim these credits and receive the associated benefit, taxpayers must file “Married Filing Jointly” or “Head of Household.” Both filing statuses allow the taxpayer to claim credits like the Earned Income Tax Credit, which is a refundable credit that can increase your refund or decrease the amount you owe by hundreds to thousands of dollars. If you're widowed and file as “Qualified Widow/Widower with Dependent Child,” you'll also be eligible for the Earned Income Tax Credit. Married taxpayers who file separately aren't eligible for some credits, such as the Earned Income Tax Credit. There are no benefits to filing "Single" if you have a qualifying dependent.
Tax Credits and Benefits
Claiming your baby may also make you eligible for the Child Tax Credit and the Additional Child Tax Credit, which can add up to $1,000 to your refund. If you paid someone to care for your baby during the tax year so that you or your spouse could work, you may also be eligible to claim the Child and Dependent Care Credit. This nonrefundable credit can lower the amount of taxes you owe. Another benefit of claiming your baby is the standard deduction exemption, which can reduce your adjusted gross income and decrease the amount of taxes owed on your income. For additional information about claiming your baby, contact the Internal Revenue Service at IRS.gov.
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