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Our daughter graduated from college in May, lived at home during the summer, started a graduate program in the fall. As part of the terms of receiving her fellowship (tuition + stipend), she has to establish in-state residency. She is 22.

I understand that her tuition benefit is not taxable; and that up to age 24 we can claim her as a dependent, assuming she is a full-time student. Questions:

1. I was under the impression that there was an income limit she cannot exceed for us to claim her as a dependnet. I cannot find this information on the IRS site; maybe I'm confusing that limit with the limit for needing to file a return.

2. If we don't claim her, do we jeopardize our ability to be able to deduct tuition payment we made for college?

3. If we do claim her, is there any chance we jeopardize her bid to acquire instate residency (since August, she has paid all her own expenses -- apartment, insurance, has registered car in state, has acquired a drivers' license there, etc.).

Thanks in advance for any help.
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