If your daughter's total reportable earnings are less than $6350, then it doesn't need to be reported by her. Her reportable earnings would be anything reported to her on a tax reporting document, such as a W-2, 1099-INT, 1099-MISC, and the such. If you take that amount and add the *un* qualified part of the 1099-Q to it, and it does NOT exceed $6350, then she doesn't need to file it.
Also, I bet you that the excess does qualify. Remember, 1099-Q funds can be used for the qualified education expenses of tuition, books, and lab fees *AND* the unqualified expenses for room and board, provided that room and board is in support of the student's education. If she's living more than 50 miles from home, then there's no doubt it's in direct support of the student's education.
Finally, The "room" part of that is not just rent either. It also includes the cost of utilities (electric, water, internet, etc) and the "board" part includes food. So are you sure you can't allocated the 1099-Q funds you are calling excess, to those expenses?
