My daughter is a full time college student living away from home age 23. I paid over 50% of her living expenses in 2008 and she worked earning a little over $10,000. In 08. Her mother claimed her as a dependent as she has since our divorce over 10 years ago. I ented her as a Nondependant - Used for EIC/dependant care only. Turbo Tax instructed me that I could file this way as long as she is a student under 25 & over 19. My return was rejected by the IRS because both parents can't claim as a dependent. When I changed her status to My child away at college Turbo tax also accepted that. I'm just not sure if it's correct since her mom also claimed her as a dependent. Should I just claim her as a non dependent and pay the extra tax (which is significant). Trying to get my ex to amend her return is not an option.

Look at the personal exemption line on your tax return. If it adds your daughter's $3,500 personal exemption, that is the reason the IRS rejected it.

File Head of Household and claim your daughter as a "qualifying person" but not as an exemption. That should fix the problem.