Note, this is an amended question to one I posted 5 days ago:
My 21 yr old daughter is a full-time student and dependent on my tax return. She did not work in 2017. We received 2 1099-Q forms for her 529 account. She was the recipient on the ones that were sent directly to the school for tuition and fees and school-mandated health insurance. I was the recipient on the funds that were used to pay for off campus room and board (which exceeded the university's listed cost of attendance budget). Since the cost of attendance budgeted amount for room and board was exceeded, it's my understanding that the excess is a non-qualified distribution. Also, the health insurance on her 1099Q is non qualified. This has generated a non-qualified taxable income of several hundred dollars on both of our 1099s. If she does not have other income for the year, and her non-qualified distributions are around $650 (listed as 'income'), does she still need to file a separate tax return in her name because of this? Thanks!