Hello Baker2988,
Thanks for the great question, I am sure this will affect many taxpayers.
The fact that your mom and daughter did not live together does have an affect on the ability to claim her as a dependent. However, your mom may be able to claim your daughter as a Qualifying Relative. I will include the link to a flow chart that should help in making this determination. Remember, the questions will need to be answered from your mom's perspective.
https://apps.irs.gov/app/vita/content/globalmedia/dependency_exemptions_4012.pdf
Of course, if you have further questions, you can always reach out to us again here.
Best regards,
STaxLady
For her to claim the child as a qualifying relative then the child cannot be YOUR qualifying child which she is if she lived with you, she is under the age of 19 ( 24 if a college student) and she is not self supporting. So if you are required to file a return then you must claim the child on your return and for 2021 you really do want to claim the child ... the CTC and the EIC are more beneficial to you if your income is lower than your mom's.