My guess as to why this fluctuation may be happening is that the software presumes that the new dependent will be a qualifying child and then corrects when the dependent becomes a qualifying relative?
The tests for a qualifying child are:
- Relationship: Must be your child, adopted child, foster child, brother or sister, or a descendant of one of these (grand or nephew).
- Residence: Must have the same residence for more than half the year.
- Age: Must be under age 19 or under 24 and a full-time student for at least 5 months. They can be any age if they are totally and permanently disabled.
- Support: Must not have provided more than half of their own support during the year.
- Joint Support: The child cannot file a joint return for the year.
The tests for a qualifying relative are:
- Qualifying Child: They are not the “qualifying child” of another taxpayer or your “qualifying child.”
- Gross Income: The dependent being claimed earns less than $4,300 in 2020.
- Total Support: You provide more than half of the total support for the year.
- Member of Household or Relationship: The person (a friend, girlfriend, non-blood relative) must live with you all year as a member of your household or be related to you.
See this TurboTax Help.
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