Am I able to claim internet as part of the education credit if my daughter was in school online all year?

Unfortunately, no, this is not deductible as part of the expenses for the education credits.  However, if you have any disbursements from 529 college savings plans you may be able to match this expense to that income. 

Darn. The new laptop we had to buy her so she could attend?

Internet: No (probably)

Laptop: Yes

 

For the purpose of the AOTC, the materials must be needed for "meaningful attendance or enrollment" in a course of study.  It's generally accepted that a computer is required for college, particularly on-line courses. 

 

If you need to purchase or upgrade internet for online classes, the internet counts too.  But, if you used existing internet, it doesn't count.

 

Reference:  http://candaceebert.com/blog/the-irs-has-become-more-liberal-with-college-expenses