If the child is born alive on or before December 31, then: You as parent always get first choice to claim the child as dependent. Your parents (the child's grandparents) also qualify, as long as their income is equal or more than yours. In most cases, the taxpayer with the higher income will get the larger tax break for the child, however, the only way to know for sure is to test it both ways. It would be a shame for you to insist on your right and then get nothing back because your income was very low. Note that to claim the child, you will need a social security number, so you can't file until it arrives. Often the birth hospital will help with the application paperwork.
