You should be able to claim your daughter as a dependent on your tax return under the Qualifying Child rules since she is a full time student and under the age of 24. When entering her as your dependent in the My Info section of the TurboTax program indicate that she lived in your home for the entire year (any temporary absence for education is still considered living in your home). Also indicate that she is a full time student. Her income is not a factor when claiming a dependent under the QC rules.
When your daughter files her tax return, she Must indicate on her tax return that she can be claimed as a dependent on someone else's return.
To be a Qualifying Child -
1. The child must be your son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them.
2. The child must be (a) under age 19 at the end of the year, (b) under age 24 at the end of the year and a full-time student or (c) any age and permanently and totally disabled.
3. The child must have lived with you for more than half of the year. Temporary absences while away at college are considered living with you.
4. The child must not have provided more than half of his or her own support for the year.
5. If the child meets the rules to be a qualifying child of more than one person, you must be the person entitled to claim the child as a qualifying child.
6. The child must be a U.S. citizen or U.S., Canada or Mexico resident for some portion of the year.
7. The child must be younger than you unless disabled.
