Yes, you can definitely claim an October baby as a dependent when you file your 2011 taxes.
In fact, you could even claim a baby born on December 31 as a dependent for the entire tax year.
Don't take my word for it.
Here's the official rule from IRS Publication 501: "A child who was born or died during the year is treated as having lived with you all year if your home was the child's home the entire time he or she was alive during the year.
The same is true if the child lived with you all year except for any required hospital stay following birth.
" This same rule also applies to adoptions.
As you will soon discover, claiming a child as a dependent on your tax return can be quite lucrative.
Among the tax breaks you'll now be able to take advantage of are an additional personal exemption and the Child Tax Credit.
Additional Personal Exemption - The tax code allows you to claim what's called a personal exemption for yourself, your spouse, and all of your dependents.
An exemption is an amount of money ($3,700 per person for 2011, $3,800 per person for 2012) that you can subtract from your adjusted gross income (AGI).
The more exemptions you claim, the lower your taxable income you will be, the less tax you'll pay/the bigger the refund you'll receive.
In other words, additional personal exemptions are good.
Child Tax Credit - The Child Tax Credit is a special credit that allows you to claim a credit of $1,000 per every qualifying child under the age of 17 that you list on your account.
This means that every child you have will reduce your tax liability by $1,000 or increase the amount you receive as a refund by $1,000.
The credit does phase out beyond certain income limits.
You will receive a reduced credit or no credit at all if you make more than

• $110,000 if married filing jointly
• $75,000 if single or Head of Household
• $55,000 if married filing separately

Earned Income Tax Credit - In order to take the Earned Income Credit, you must have received earned income - i.
e.
income from employment or self-employment.
Plus your income must fall under the income limits, which are much higher if you have just one child.
The income limits are

• $13,660 with no child
• $36,052 with one child
• $40,964 with two children
• $43,998 with three or more children

The amount of the credit also increases significantly if you have just one child:

• $464 with no child
• $3,094 with one child
• $5,112 with two children
• $5,751 with three or more children

The moral of the story? Children can be very beneficial for your tax situation.
And if one is born in the middle of the year - or even at the very end - to be afraid to claim that baby as a dependent!