Daughter just turned 23 and graduated from college 5/09. Lives at home works and just pays her student loans which are high. Can we clain her as a dependent for 09? Also if we pay off some of her loans can we claim her for 2010?

For 2009 you can, as long as she provided less than half her own support for the year. For 2010: no, unless she makes less than $3650 and you provide at least half her support.