Can I claim my child as dependent if my wife isn't working?

[EldarB]

My wife and I moved to the US in 2023. We have a 5 y/o. Wife doesn't work. Filed taxes as "married, filing jointly" with 1 dependent in-person at the IRS office with the two ITIN applications for wife and child. My wife's one was approved but the kid's was denied. The reason they stated in the mail response was that some documentation is missing but the IRS person who was accepting our application confirmed that we had everything required for the ITIN application. Same happened after the second attempt, even though IRS lady confirmed we had everything for the ITIN to be granted. The 2023 tax was accepted by the IRS but recalculated as they subtracted the dependent benefit since my child was denied the ITIN and he can't be counted as dependent. So is the fact that my wife doesn't work was the reason we couldn't claim our kid as dependent and ITIN was denied? 

[TomD8]

Possibly a stamp of entry was missing?

From the instructions for Form W-7:

"The passport isn’t a stand-alone document for certain dependents if no date of entry into the United States is present.  A passport that doesn’t have a date of entry into the United States won’t be accepted as a stand-alone identification document for certain dependents."

Instructions for Form W-7 (Rev. November 2023) (irs.gov)

[xmasbaby0]

Your problem with claiming your child has nothing at all to do with your spouse not working.   A married couple can file a joint return and claim a child as a dependent even if one spouse has little or no income.   Your problem with the child-related credit is not because of your wife's lack of income.   Something else went awry, that you will have to sort our with the IRS.

[EldarB]

We did have I-94 report with all the info about arrivals but IRS lady only took passport, visa and medical card for proofs and attached it to the return.

[TomD8]

Was the passport stamped with the date of entry to the U.S,?

[EldarB]

No, no stamps on all of our passports. Wife's passport doesn't have the stamp but her application was accepted.

[TomD8]

The absence of a date of entry stamp is the likely reason your child's ITIN application was rejected.  The requirement applies to "certain dependents" per the W-7 instructions.  A spouse is not a "dependent" to the IRS.  See Proof of U.S. residency for applicants who are dependents on page 4 of the instructions.