If the child has lived with you the entire time since she was born, then she is your dependence. In TurboTax, you would select "all year" as the length of time she lived with you.
Because you are her aunt, it is not even necessary that the state placed her in your care. A parent, grandparent, aunt, or uncle can claim a child as a dependent as long as the child lived with them more than half the year, or in the case of a child born during the year, the child lived with them more than half the time since they were born.
You would also qualify to claim the child under the foster parent rule, since she was placed in your care by the state. A foster parent has the same right to claim a dependent as a biological parent. Again, the key question is where did the child live at least half the nights since he was born.
