Yes.  If she is under 19 you can claim her no matter how much she makes.  Do they live with you?  You can probably claim the baby too.  If she files her own return be sure she checks the box that says someone else is claiming her.  Since you are claiming her she won't be able to claim the baby on her return.

@VolvoGirl - can we review the response again? I am a little confused

First, isn't the daughter and granddaughter required to live with the taxpayer and for the taxpayer to provide over 50% of living support for the tax paper to claim someone as a dependent? I appreciate you asked the question as the information wasn't provided. 

I thought there is no income text to determine if the person is a dependent; however, there is an income test for some of the credits themselves.   Since there is no 'deduction' anymore, isn't being able to claim someone as a dependent just the first step towards determining whether there is money available (the credits)? 

So even if the daughter is under 19 and can be a claimed as a dependent, tax credits may not be available if the daughter's income is beyond $4200.   For the 'Credit for Other Dependents' ($500), there is an income test not to exceed $4200 in 2019.   For the granddaughter, the $2000 Child tax Credit might be available since there is no income test and the granddaughter is under 17 years old. 

Can you please clarify? 

There are two types of dependents, "Qualifying Children"(QC) and standard ("Qualifying Relative" in IRS parlance even though they don't have to actually be related). There is no income limit for a QC but there is an age limit, a relationship test and residence test.  The support test for a QC is NOT that the taxpayer provided more than half the person's support, but only that the QC did not provide more than half her own support.

A child of a taxpayer can still be a “Qualifying Child” (QC) dependent, regardless of his/her income, if:

1. He is under age 19, or under 24 if a full time student for at least 5 months of the year, or is totally & permanently disabled
2. He did not provide more than 1/2 his own support. Scholarships are considered third party support and not as support provided by the student.
3. He lived with the parent (including temporary absences such as away at school) for more than half the year

So, it doesn't matter how much he/she earned. What matters is how much he spent on support. Money he put into savings does not count as support he spent on him self.

The support value of the home, provided by the parent, is the fair market rental value of the home plus utilities & other expenses divided by the number of occupants.

If your 17 year old lived with you, you are probably allowed to claim her.  See the rules at the other replies.

The real question question here is: is she willing to agree to let you claim her and the baby.  With a baby and earned income, she's gonna get  a big check from the IRS.  What she may not realize is that you MAY get an even bigger check if YOU can claim them both.

Essentially the two of you have a choice (technically the rules still have to be met)  and the smart thing to do is prepare test returns and compare the results before deciding how to file.  This tool may be helpful: https://turbotax.intuit.com/tax-tools/calculators/taxcaster/?s=1