Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarification.
I do not see a response
Will she be living with you when she attends college?
Will you be supporting her child as well?
I will, although she is working now and will be contributing approx. 50%
She is allowed to file for Financial aid as an independent student, as the rules state that since she has a dependant she is considered independent.
"You yourself can claim a dependent for tax purposes"
The Regulations state this:
In your situation, you could claim your daughter as a dependent as she is under 24 and will be a full time student, however she will need to file a tax return to prove that she has a dependant.
She would file a tax return, and claim her child.
will she need to file for 2010 or 2011?
Whenever she has income she would file.
It would be best if she files a 2010 tax return.
thank you for your help
I would also consider, having her file her application now, and since you did not declare as has a dependent their is no issue. The IRS and Department of Education do not in reality share information so that is an option. You would file in April or file an extension.