Yes, you can still claim her as a dependent.
A child of a taxpayer can still be a “Qualifying Child” (QC) dependent, regardless of his/her income, if:
1. He is under age 19, or under 24 if a full time student for at least 5 months of the year, or is totally & permanently disabled
2. He did not provide more than 1/2 his own support.
3. He lived with the parent for more than half the year
So, it doesn't matter how much he earned. What matters is how much he spent on support. Money he put into savings does not count as support he spent on him self.
The support value of the home, provided by the parent, is the fair market rental value of the home plus utilities & other expenses divided by the number of occupants.
You do not report his/her income on your return. If it has to be reported,
at all, it goes on his own return. If your dependent child is under age 19 (or
under 24 if a full time student), he or she must file a tax return for 2017 if he
had any of the following:
1. Total income (wages,
salaries, taxable scholarship etc.) of more than $12,000 (starting in 2018,
$6350 in 2017).
2. Unearned income (interest,
dividends, capital gains) of more than $1050.
3. Unearned income over $350 and
gross income of more than $1050
4. Household employee income
(e.g. baby sitting, lawn mowing) over $2100 ($12.000 if under age 18)
5. Other self employment
income over $400, including box
7 of a 1099-MISC
Even if he had less, he is allowed to file if he
needs to get back income tax withholding. He cannot get back social security
or Medicare tax withholding.
In TurboTax, he indicates that somebody else
can claim him as a dependent, at the personal information section.
