<p>I’m confused - Just to clarify - was it taxable scholarship/grant income of your daughter’s that you reported on your tax return? If so then I don’t understand why you would do that. That is taxable income to your daughter and should be reported on her tax return, not yours. Even when claimed as a dependent on your tax return she can file her own tax return and get the standard deduction of $5700. So the first $5700 of the income on her return would not incur any taxes at all. The income over the $5700 would probably be at a much lower tax rate than yours as she would probably be in the 10% tax bracket. If you include her income on your return then it will lead to a much higher tax bill that if she filed her own return.</p>