I claim my daughter as a dependent .She is attending college and got a Form 1098T .The amount in box 5 exceed the amount in box1.does she need to file taxes in her own? even i was claimed as dependent.I need help answer the questions.

There is  a requirement to report taxable scholarship on the student's return. Taxable scholarship, including Pell grants, is the amount of the scholarship that exceeds qualified educational expenses (QEE). Tuition, fees, books and computers are qualified expenses.  if you dependent had no other income and his grants do not exceed his QEE by more than $12,400, he does not need to file. 

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 There is a tax “loop hole” available. The student reports all his scholarship, up to the amount needed to claim the American Opportunity Credit (AOC), as income on his return. That way, the parents  (or himself, if he is not a dependent) can claim the tuition credit on their return. They can do this because that much tuition was no longer paid by "tax free" scholarship.  You cannot do this if the school’s billing statement specifically shows the scholarships being applied to tuition or if the conditions of the grant are that it be used to pay for qualified expenses.

Using an example: Student has $10,000 in box 5 of the 1098-T and $8000 in box 1. At first glance he/she has $2000 of taxable income and nobody can claim the American opportunity credit. But if she reports $6000 as income on her return, the parents can claim $4000 of qualified expenses on their return.