Q. Are you saying that in this situation, she must check the box (someone can claim you as a dependent)?
A. Yes.
If she can be claimed as a dependent, but nobody is actually claiming her, she must still check that box. And that somewhat limits what tax breaks she can claim, if any.
It would be highly unusual for a full time student, under 24, with the same address as her parent, and the parent paying for her college not qualify as ("can be") a dependent.
Q. Does me paying for her college obligate her (or me) to have any bearing on how we choose to do our own taxes?
A. Simple answer: Yes. But even if she can be a dependent, you can choose not to claim her (you're not obligated to claim her, just because you are allowed to). It's her that is obligated to check not (she can't choose not to check that box).
See full dependent rules at: https://turbotax.intuit.com/tax-tools/tax-tips/Family/Rules-for-Claiming-a-Dependent-on-Your-Tax-Ret...
There are two types of dependents, "Qualifying Children"(QC) and Other ("Qualifying Relative" in IRS parlance even though they don't have to actually be related). There is no income limit for a QC but there is an age limit, student status, a relationship test and residence test.
A child of a taxpayer can still be a “Qualifying Child” (QC) dependent, regardless of his/her income, if:
- 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
- He did not provide more than 1/2 his own support. Scholarships are excluded from the support calculation
- He lived with the parent (including temporary absences such as away at school) 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 himself.
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.
The IRS has a worksheet that can be used to help with the support calculation. See: http://apps.irs.gov/app/vita/content/globalmedia/teacher/worksheet_for_determining_support_4012.pdf
