Thanks for the quick reply. She is a dependent (full time student, doesn't support herself more than 50%, etc, etc).
So she has no "earned income" in terms of wages/tips (didn't work). She does have $2076 of taxable scholarship money (amount of scholarship over tuition/fees and qualified expenses). That is looked as "earned income" for determine standard deduction so her standard deduction ends up being $2076+$350= $2426.
Therefore, she has zero tax liability since her total taxable income is $2076 but her standard deduction is $2426.
I have seen that list of 3 things before but it is very confusing.. it says if her earned income is over $12,400 on #1 but then says if her earned income is over $1,100 on #3. So which is it? And when it says "earned income" on these 3 lines, does it mean wages/tips or does it also include taxable scholarship money like my daughter has? From my understanding it says they use taxable scholarship amounts as "earned income" only for determining the standard deduction. If someone had taxable scholarship money over $12,400 (the standard deduction) then it would actually be counted as unearned income for tax purposes. So I still don't know if she needs to file or not.
