Nachman and Raizy Glauber, both 21, were on their way to hospital early on Sunday when their taxi was involved in a fatal collision in Brooklyn.
Doctors performed a caesarean section to deliver the baby alive.
Orthodox Jewish community spokesman Isaac Abraham said the newborn died at 05:30 local time on Monday.
Isaac Abraham told CBS News that the couple had a baby boy, who weighed about 4 lbs (1.8 kg).
“If he would have stayed alive, he would have been in memory and a little reminder to the grandparents of his parents,” he said.
“And now that little boy has been torn away as well.”
More than 1,000 people turned out to mourn the couple at a funeral at Congregation Yetev Lev D’Satmar synagogue.
The crash happened just after midnight on Sunday, a few blocks from the Glaubers’ home in the Williamsburg area of Brooklyn.
Seven-months-pregnant Raizy Glauber had not been feeling well, the family said, so the couple called a cab to take them to the hospital.
Their cab collided with a BMW car whose driver and passenger then fled the scene.
Authorities say the registered owner of the car was not believed to have been driving when the crash took place.
She has been arrested and charged with insurance fraud, the Associated Press reported.
Isaac Abraham said the crash threw Raizy Glauber from the car and pinned her husband inside the taxi, forcing emergency workers to cut off the roof to get him out.
Both were pronounced dead on arrival at hospital, but doctors were able to deliver the baby alive.
Isaac Abraham called the hit-and-run driver “a coward” who “should pay his price”, adding that their community wants a homicide prosecution.
He told the New York Daily News the baby boy would be circumcised and buried with his parents.
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