She is eligible to claim the third recovery rebate for 2021 provided she no longer qualified to be considered a dependent. She was claimed as a dependent on your 2020 return, and you received the payment from the IRS. If you are not claiming her this year, and she is claiming herself, she can claim the recovery rebate.
She would answer no to the question about the third stimulus if she is not a dependent for 2021. She can claim herself and take the credit since the payment did not go to her. You will need to report the stimulus received on your return even if you don't pay it back.
See this article by the IRS.
@kgfair1029
[Edited 04/04/22|1:44 PM PST]
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
