You *could* claim both of them as dependents. If your daughter files a return and claims her child she is not eligible for any refundable child tax credit and would only get about $383 of earned income credit. You, on the other hand, could potentially get the full amount of child tax credit and possibly earned income credit based on a larger amount of income, and file as Head of Household. You would also get a $500 credit for other dependents for claiming your daughter.
If you file and claim them---your daughter does not even need to file, since you say she had no tax withheld from her paychecks. She has nothing to gain by filing a return that does not claim the child.
WHO CAN I CLAIM AS A DEPENDENT?
You can claim a child, relative, friend, or fiancé (etc.) as a dependent on your 2023 taxes as long as they meet the following requirements:
Qualifying child
- They're related to you.
- They aren't claimed as a dependent by someone else.
- They're a U.S. citizen, resident alien, national, or a Canadian or Mexican resident.
- They aren’t filing a joint return with their spouse.
- They're under the age of 19 (or 24 for full-time students).
- No age limit for permanently and totally disabled children.
- They lived with you for more than half the year (exceptions apply).
- They didn't provide more than half of their own support for the year.
Qualifying relative
- They don't have to be related to you (despite the name).
- They aren't claimed as a dependent by someone else.
- They're a U.S. citizen, resident alien, national, or a Canadian or Mexican resident.
- They aren’t filing a joint return with their spouse.
- They lived with you the entire year (exceptions apply).
- They made less than $4,700 in 2023.
- You provided more than half of their financial support.
When you add someone as a dependent, we'll ask a series of questions to make sure you can claim them. There may be other tax benefits you can get when you claim a dependent.
Related Information:
To claim a grandchild as your dependent
When you enter the child’s name in My Info, you will be asked “What’s your relationship to [child’s name]?”
Choose “another person”
a drop down menu will appear that lets you choose grandchild
IRS interview to help determine who can be claimed:
https://www.irs.gov/help/ita/who-can-i-claim-as-a-dependent
**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
