@kusaii The tax return is a reconciliation of your tax situation. Withholdings from income (especially at the federal level) are almost never "exactly withheld". This is why almost all returns result in a refund or an amount due.
But here is how claim of right works: In 2021, you will claim all of the income and withholdings that are reported to you. Let's assume that in 2022 you end up paying back the entire 8800 because it's not forgiven (and it would behoove you to repay the entire amount if at all possible to do so). In reality, this makes the claim "no longer income" on your 2021 return, but the IRS specifically forbids you to file an amended return for this situation (under Section 1341 of the Internal Revenue Code). Rather, you are either allowed to claim a deduction of the income against your 2022 income (which is only valuable if your 2022 income is greater than your 2021 income and you are already itemizing deductions instead of the standard deduction), or you may claim a credit. To claim the credit, you keep a copy of your 2021 return and run a "what if" amendment subtracting the income you received. You note how much extra refund this would generate, and that is the credit you claim on your 2022 return. Chances are extremely likely that the credit difference is greater than the $900 you had withheld from the original payments. If in 2022 you would normally receive a refund, this credit would increase the refund.
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