Solved
So then it said she does not qualify as a dependent and put her as a non dependent. And my other daughter is my dependent. So did I do this correctly?
If the child lived with you more than half the year, then by IRS rules you are the custodial parent and you have the right to claim him/her.
If you wish to allow the non-custodial parent to claim the child, then you must furnish them with a signed IRS Form 8332, which they must submit with their own tax return. Here's a link to that form:
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