Rule of thumb: if the support question is so close that you're "fine tuning" the calculations, then the student is still your dependent. Most college age students are still dependents.
Two different support rules:
1. In order to claim the refundable portion of the AOC, her W-2 income needs to be more than half her support.
2. In order to not be your dependent , she only needs to provide more than half her own support from all her resources, W-2, loans, savings (but not scholarships).
While technically there is a provision that allows your student-dependent to claim a federal tuition credit, from a practical matter it seldom works out. A student, under age 24, even if not a dependent, is only eligible for the refundable portion of the American Opportunity Credit (AOTC) if he/she supports himself by working. She cannot be supporting herself on student loans & grants and 529 plans and parental support. It is usually best if the parent claims that credit.
If the student actually has a tax liability, there is a provision to allow him to claim a non-refundable tuition credit. But then the parent must forgo claiming the student as a dependent, and the $500 other dependent credit. The student must still indicate that he can be claimed as a dependent, on his return. This is worth up to $2500 (AOTC shifts to all non refundable)
