Generally, the student claims the taxable income. But you can claim it (Form 1098-T) on your tax return. You may be able to have your daughter claim enough of the taxable income, applied to R&B, to allow you to take an education credit on your tax return. She will get her standard deduction which will reduce or eliminate any tax. You can split up the income and expenses (qualified and non-qualified) between your two returns. The IRS encourages this to maximize the education credits. See Examples for Pub 970 (2024) - the 3rd, with partial scholarship, would apply.
Families may be able to increase their total refund or reduce tax liability by paying some tax on their scholarships and increasing their tax credit. Students may choose whether to treat their scholarships as used for tuition and related fees (tax-free, but reduces expenses for credits) or as used for living expenses (taxable, but does not reduce expenses for credits). From The Interaction of Scholarships and Tax Credits. it is from 2014, but still valid and useful today.
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