esane
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Get your taxes done using TurboTax

Yes because in order for your sister to claim your child she has to say that she supported her for more than half of the year.(Qualifying dependent)  According to public assistance your sister is supposed to be included in your household income if she files her taxes with your daughter. If your sister claims your child and you did not include her to public assistance they will make you pay back the assistance plus remove your daughter and possibly yourself from the program.