In the Name of Allah, Most Gracious, Most Merciful.
All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.
In this fatwa:
Answering your question, Dr. Wael Shehab, PhD in Islamic Studies from Al-Azhar University and currently the Imam of the Downtown Toronto Masjid in Canada, states:
The Messenger of Allah (peace be on him) was born on Monday, the twelfth of Rabi` Al-Awwal in the year of Al-Fil (the Elephant), 571 AC. Muslims in different parts of the world, when the month of Rabi Al-Awwal arrives, remember this great occasion.
Muslim communities all over the world show their love to Prophet Muhammad (peace be on him) in diverse ways. Showing love to prophet Muhammad (peace be on him) should never be a reason to divide our communities; it rather should bring us all closer though we might disagree or agree with some ways that some people adopt in showing their love to prophet Muhammad (peace be on him).
In fact, I see that some people go into extreme by describing the mere remembrance of the occasion of the Prophet’s birthday as bidah (forbidden innovation in religion).
It is OK to commemorate the Prophet’s birthday, without inventing new rituals in religion, and seize the occasion to revive and live the Prophet’s Sunnah.
It is noteworthy that the Prophet (peace be on him) commemorated his birthday when he replied a man who asked him about fasting on Mondays, saying, “On that day I was born and on that day Revelation descended upon me.” (Muslim and Ahmad)
Moreover, we have precedents in the life of the Prophet (peace be on him), as well in the life of his pious predecessors, to commemorate things or events associated with the Prophet (peace be on him). For example, the Companions commemorated the event of the Prophet’s Hijrah and made it the start-date in the Islamic calendar.
Birthdays celebrations, generally speaking, fall under the category of customs that are permissible in principle provided that there is nothing haram (unlawful) is associated with it. Therefore, it is OK for people to celebrate their kids’ birthdays through permissible means.
On the occasion of the Prophet’s birthday, we should raise awareness about his morals and values, introduce him to our kids, families and communities, revive and live his Sunnah, and translate his noble teachings into practice.
May Allah accept your and our good deeds, ameen.
Allah Almighty knows best.