Since the distribution was made on March 4, 2022, it was properly done after April 15, 2021 as a regular distribution with no distribution of attributable earnings. In this case it is a nontaxable distribution of contribution basis so there is no income tax or early-distribution penalty on this. Your daughter's 2022 tax return will include the distribution on line 20 of Form 5329 to eliminate the excess-contribution penalty for 2022 and beyond. Since the distribution is not taxable, there will also be no 2.5% California early-distribution penalty on this distribution.
There is a 6%, $75 excess-contribution penalty due with the completion of Part IV of a 2020 Form 5329 which can be mailed stand-alone if not already done. As you have indicated, another 6%, $75 excess-contribution penalty is due with Part IV the Form 5329 included with your daughter's 2021 tax return (or sent stand-alone if she is not otherwise required to file a 2021 tax return) because the excess carried into 2021 was not corrected before the end of 2021.
Injury settlements are generally tax exempt, so it would not have been included in taxable income on her 2020 tax return.
