Did you run the dependent interview in Turbotax, that will tell you.
1. For your daughter, you can claim her if she meets all the tests for one of the types of dependents:
qualifying child dependent
a. she lived in your home more than half the year
b. she is under age 19, or under age 24 and a full-time student for at least part of 5 months of the year.
c. she does not provide more than half her own support.
qualifying relative dependent
a. you provide more than half her total support for the year
b. her taxable income is less than $4700
(for this test, she can be any age and live anywhere)
For your grandchild, you can claim her as a dependent if she meets these tests:
a. she lived in your home more than half the nights of the year (slept in your home, babysitting doesn;t count)
b. you have more taxable income than any other taxpayer who could qualify to claim her (your daughter is a taxpayer if she has more than $13,850 of taxable income, or if she has less income but files a return and claims any credits or deductions. She is not a taxpayer if the only reason she files is to claim a refund of withholding and she claims no credits or dependents.) A non-resident/non-custodial biological father does not have the automatic right to claim the child as a dependent, but the mother could potentially give the biological father a waiver to allow him to claim the child, in which case you can't also claim the child.
Babysitting does not count as the child living in your home, unless you mean the child lives there full time and you babysit during the day. Your daughter may not be a full time student in 5 months if she only attended school for one quarter.
