For us it is not advantageous to not claim our daughter as a dependent on taxes.
First, we can claim one more year of AOTC, even if we can only claim fees of about $1,000 (she has a tuition scholarship).
Second, we will get a $500 dependent credit for her.
And third, if she gets more than 50% of her support from us, she counts as a second student in college, and reduces our FAFSA EFC by half, making both her and her brother eligible for a state grant.
Next year she won’t be eligible for the state grant, but her brother would be, if he has a lower EFC due to her being a second student in college.
Also while the AOTC can only be claimed for 4 years, we might be able to claim the lifetime learning credit.
If you do want your child to be independent for taxes, and not be subject to kiddie tax, I think they have to have earned income, and spend it on more than 50% of their own support.
Third party support like grants and scholarships doesn’t count for either parent or student provided support.
Student loans taken out by the student and spent on education expenses could count as student provided support.
Read the rules for claiming the refundable part of AOTC and kiddie tax rules again, they are quite complicated as well.