That's the conclusion I came to after going to read p970 on the IRS site. That was the answer I was looking for. She gets more back if she takes the credit, but...

Also, I can't just not report the 1099-Q. It's required to be reported.

I cannot claim her as a dependent. Therefore, this is being reported on her taxes. I deleted both forms. Doing this reduced her refund even further. She only to...