The IRS considers a child (or another dependent, such as a parent) who was born or died during the year and meets all other dependency tests to have lived in the home for the full 12 months, regardless of how long that dependent was alive during the year.
Enter all information as you normally would, including 12 for the number of months in the home.
If the child was born and died during the year, and the parents did not have the opportunity to get a Social Security Number for the child, you will not be able to electronically file the return.
You need to override to enter credits for the child, such as the Child Tax Credit or EIC.
One way to do this is to enter a false Social Security Number on the Main Information Sheet to calculate the credits. Override the entries on Form 1040, Schedule EIC, Form 8812, and other forms to lock in the amounts, and then take the SSN off the Main Information Sheet.
Once you print the return, attach a copy of the child's birth certificate to it, write DIED in the space for the Social Security Number, and then mail the return to the IRS.
Note: A dependent child must have been born alive to qualify for an exemption. The IRS does not allow an exemption for a stillborn child. See IRS Publications 17 or 501 for more information on dependent exemptions.
This applies to all current and prior years of UltimateTax software.
Entering information for a deceased spouse