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She is 21 years old and she is a full time student. So I can claim her as my dependent.

She got w2.

In my tax returen I did not add her income  which is correct as you mentioned.

She did not file her tax to get the withholding back because she  thought that once her parent's claim her as dependent then she can not file her tax seperatly to take the holded tax back.

That means she paid unnecessary tax to the goverment, right?

Can I also understand the $12550 is the threshold that people start to own tax to the goverment? There is no tax should be owned under $12550, right?

Thanks