dmertz is correct in his comments on how to handle the distribution if your daughter is not your dependent. The "mistaken distribution" is an excellent way to handle this if your daughter turns out not to be a dependent.
However, we in the Community can't say for sure if she is a dependent or not based on what you have told us. Please see the Pub 17 section on who is a dependent (starting at the bottom of page 26). The fact that she moved out not is not sufficient to determine if she was a dependent in 2023. Please review Table 3-1.
What is important is her age, where she was living (and for how long), did she support herself, and so on.
As for whether or not you could spend money for her medical care, the answer is a bit more complex that just being a dependent. Pub 969 (page 9) says:
Qualified medical expenses are those incurred by the following persons.
1. You and your spouse.
2. All dependents you claim on your tax return.
3. Any person you could have claimed as a dependent on your return except that:
a. The person filed a joint return;
b. The person had gross income of $4,400 or more; or
c. You, or your spouse if filing jointly, could be claimed as a dependent on someone else’s 2022 return.
Now, you may be right that she was not qualified to benefit from this distribution but since we know so little about your situation, I have to ask.
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