Richard Dennis, 62, will not face charges for the shooting that's being called a "horrible accident."
The victim, who remains in the hospital, didn't have a license to carry a handgun in Indiana, police said.
The suspect faces a criminal negligence charge.
Cedrick Jelks, 38, may face criminal charges for possession of the firearm.
According to the CDC, in 2014 slightly less than 16,000 Americans accidentally shot themselves or someone else and survived
"The last [mental] picture I have is her dying on my lap."
"There's no way to wipe the images away from your mind of your little brother bleeding out in your arms."
Incident happened at a car dealer.
The 2-year-old grabbed a gun his mom's boyfriend had left in the car.
Cincinnati police chief Eliot Isaac calls shooting an "unimaginable" tragedy.
Watch the dashcam footage of the officer who accidentally shot a DUI suspect.