IRC code section 1341 governs
If repayment is in an ensuing year, and the repayment was more than $3,000, you
can take it as a deduction on Schedule A line 16, denoted as IRC 1341 repayment, or
recompute the taxes in the year you received the payment by excluding the payment.
The decrease in taxes is taken as a credit on Schedule 3 line 13b
