When it comes to claiming an exemption for a dependent, the IRS says in Publication 17:
"Death or birth of child. A child who was born or died during the year is treated as having lived with you more than half of the year if your home was the child's home more than half of the time he or she was alive during the year. The same is true if the child lived with you more than half the year except for any required hospital stay following birth. "
Clearly, any child born in the last half of the year couldn't have lived with the family at least 6 months, so, in this case, it's counted as "all year".
Whether or not the child is considered a "qualifying child" in either 2016 or 2017 will depend on the facts and circumstances. There are 5 tests for a qualifying child:
1. Relationship,
2. Age,
3. Residency,
4. Support, and
5. Joint return.
Note that
"You generally can’t claim a person as a dependent unless that person is a U.S. citizen, U.S. resident alien, U.S. national, or a resident of Canada or Mexico. However, there is an exception for certain adopted children, as explained next.
Exception for adopted child. If you are a U.S. citizen or U.S. national who has legally adopted a child who isn't a U.S. citizen, U.S. resident alien, or U.S. national, this test is met if the child lived with you as a member of your household all year. This exception also applies if the child was lawfully placed with you for legal adoption."
Also note:
"Adopted child. An adopted child is always treated as your own child. The term “adopted child” includes a child who was lawfully placed with you for legal adoption."
(Both citations from Publication 17 (above)).
