Let's first address the dependent issue. 19 y.o. who are full time students almost always are dependents, regardless of how much they make.
There are two types of dependents, "Qualifying Children"(QC) and standard ("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
If that is the case, go thru the dependent interview again. In particular answer that she lived with you all year. Being away at college is only a temporary absence. If she doesn't meet the QC rules, then having more than $4300 of income will prevent her from being a Qualifying Relative dependent.
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