Removing a Dependent + Adding a Dependent

[raquelhines22]

My step-daughter only lived with us for the first 3 months of 2021. We did receive the 3rd stimulus check for her in March. I also gave birth to a son in August of 2021. According to Turbo Tax I am not eligible for a Recovery Rebate, but wouldn't I still be eligible for the $1400 for my son born in 2021 or does removing my step-daughter as a dependent for 2021 cancel that out?

[DMarkM1]

Yes you are correct.  The stimulus payment you received was an advance of the Recovery Rebate Credit and was based on your 2020 tax return with your stepdaughter as a dependent.  Your Recovery Rebate Credit is based on having 3 people with your newborn but without your stepdaughter on your 2021 return.  Since you already received payment for three people there is zero credit remaining to be paid.