Because she qualifies as your dependent, and therefor she does not get the self-exemption. As a college student under the age of 24 on Dec 31 of the tax year, she "qualifies" as your dependent. It doesn't matter if you claim her as your dependent or not. If she just *qualifies*, then she must select the option on her return for "I can be claimed on someone else's return".

Therefore, she gets the $6300 standard deduction, but she does not get the $4050 self-exemption. You the parent get that when you claim her as a dependent on your tax return. So her income over $6300 is taxable income to her.