sroussak,
My apologies for the delay. I also volunteer with AARP TaxAide and have been kept busy the last several days with remote assistance while taxpayers prepare their online taxes.
You are certainly correct that your daughter should not have a large CA tax bill if the scholarship is the only sizeable portion of her income. Indeed, her standard deduction in CA is at least the amount of the scholarship. Not seeing your return, I cannot fully diagnose what is going on, but I strongly suspect that the scholarship income isn't being treated as earned income. (You should also inspect all entries for typos, e.g. an entry where you failed to type a decimal point when entering the cents.) I would go back to the federal return and remove the scholarship entry, wherever it was, and reenter the amount by drilling down into Miscellaneous Income and either entering the scholarship under Other Income Not Reported On a Form W-2 or entering it under Other Reportable Income. After that proceed to the state section and make sure there is no child's unearned income or at least that the scholarship isn't part of her unearned income.
Finally, should all else fail, go ahead an e-file the federal and download the CA 540 fillable PDF and its instructions. You'll find that it will be very straightforward to complete and she can sign and mail it at the post office. (If the scholarship is her only income and is, indeed, no more than $4,537, she doesn't have to file a CA return.)
