Is it better to claim child as a dependent if they are a college student?

I have a 21 year old daughter who is going to college.  Last year I claimed her as a dependent and took the credits for her schooling.  She works a part time job, but I cover her insurance and pay for food and medical needs.  Is it better for me to claim her as a dependent or for her to claim herself?  I want to get the best deal for both of us.
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    The prior answer was incorrect.  Claiming her does not at all depend on your support.  The question is not whether you provided one half of her support but whether she provided more than 1/2 her own support for the year.  When you see that question in the dependent interview, you can click the blue word support to see how to determine this.  If she can be claimed on your return, she will have to mark that on her own return whether you claim her or not.  It's not a decision the two of you are allowed to just make between you.
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      Any scholarship money in excess of her qualified education expenses is considered taxable income.  In this case, there is no Education Credit for you.  For that reason, the taxable scholarship is entered on your daughters tax return as "less common income".  Go to: Income / Less Common Income / Scholarship.  The taxable amount will be added to line 7 (Form 1040) with the notation "SCH" on the line.

      You continue to list her as your dependent on your return and still retain her $3,700 exemption.
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        The question of dependency depends on the answer to the question of who provides more than 50% of her support in 2011.  Most of the time, a student does not make enough with a part time job to provide enough of their support to claim independence.  If you can still claim her as a dependent, you would get the greater benefit from the education credits as you will probably have a greater tax burden than she does.
        • What if the child scholarship money exceeds her qualified education expenses?  My daughter has excess funds and works part time but I still eligible to claim her as a dependent because I provide more the 50%. (which was part of my tax planning for 2011)

          I am concerned what this scholarship excess means for my family taxes? No educational credit, $6019 additional income and $3700 personal exemption.  If I claim her, will I owe more taxes because the of increased income OR will I owe more taxes because I do not claim her as a exemption (-$3700)?

          in other words...
           Do I have to claim her (excess scholarship money) income to receive her exemption?  Can she file with the 1098T and still be an exemption for me?


          Help!  not planned and do not want to make a mistake... best option for both of us. Please, Help.
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