<p>You absolutely cannot report any taxable scholarship/grants your daughter has on your return. Her being your dependent doesn’t change that. If all her QEE for the AOC are covered by her scholarships/grants you don’t have any QEE to use for the AOC on your return unless she reports an additonal scholarship/grant amount as taxable. If the terms of the scholarships/grants allow it, she can allocate additional parts of her scholarships/grants toward room and board, report the additional amount on her return and pay tax if above the standard deduction and you can use those expenses for the AOC. A credit for you with her reporting more income is generally better for the family as a whole. Remember to include required books and supplies as QEE.</p>