Yes, as long as your sister isn't claiming her. And that depends on when last summer, your sister moved out. It's not clear if your niece is still living with you or she moved to TX with her mother.
There are two types of dependents, "Qualifying Children"(QC) and
other ("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 and residency requirement. Only a QC qualifies you for the Earned Income Credit and child tax credit. They are
interrelated but the rules are different
for each.
A child closely related
to a taxpayer can be a “Qualifying Child
(QC)” dependent, regardless of the child's
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
3.
He lived with
the relative (including temporary absences) for more than half the year
4.
He is younger
than the relative (not applicable for a disabled child)
5.
If the child meets the rules to be a
qualifying child of more than one person, you must be the person entitled to
claim the child as a qualifying child (this essentially means that you have the
parent’s permission to claim the child). So, if your sister also lived with her child for more than half the year, she has first claim on the dependent, regardless of who provided the support.
6.
If the parents of a child can claim the child as a
qualifying child but no parent so claims the child, no one else can claim the
child as a qualifying child unless that person's adjusted gross income (AGI) is
higher than the highest AGI of any of the child's parents who can claim the
child.
