In some cases, when you first enter a dependent, TurboTax assumes that she has a Social Security number, so it gives you the child tax credit, which could be up to $2,000. Then, when TurboTax asks for her Social Security number and you enter an ITIN instead of a Social Security number, it takes away the child tax credit and gives you the credit for other dependents instead, which is only $500. The smaller credit makes your refund less. A child with an ITIN is not eligible for the child tax credit.
I'm not sure exactly what makes this happen. It doesn't always happen, but it seems to be more likely to happen if you previously entered a dependent and deleted the dependent, or went back and changed dependent information. It will definitely happen if you first entered your daughter with a made-up Social Security number, then changed it to her ITIN. This may be a minor quirk in the TurboTax interview, but the end result on your tax return is correct.
