"My daughter will have taxable income after deductions of about $2,700".
Is that the amount on line 15 of form 1040? Does that include the $3068 taxable portion of the 1099-Q?
Q. Do you have a sense if the better global benefit is to allow my daughter to claim AOTC and get a full amount versus me no longer being HoH and only claiming the Premium Tax Credit?
A. No. Her tax liability (which will be the amount of AOC she gets) is much less than the close to $2500 AOTC you will get. Even if she did qualify as a dependent, your AOTC is still larger).
If your daughters are under 24 and full time students they are not eligible for the refundable AOTC, unless more than 50% of their support comes from her earned income. If they have a tax liability they can claim the AOTC as a nonrefundable credit, but then the parent has to forego the $500 dependent credit.
Reference: Line 7 instructions for form 8863. https://www.irs.gov/instructions/i8863
When I did a test (desktop Deluxe) I got the R&B entry screen (in both the parent and student returns). Since you have calculated the taxable amount, manually, there is a work around for entering it, but you won't get any supporting work sheets.
