Here's how to enter the credit in the CD/Download TurboTax software for 2021. It's not covered in the Step-by-Step interview. You have to make the entry in forms mode. Go to forms mode and open the "Form 1040 or Form 1040-SR Worksheet." Scroll down to the "Other Credits and Payments Smart Worksheet" near the bottom. Enter the credit that you calculated on line E of the "Other Credits and Payments Smart Worksheet." The credit will then appear on Schedule 3 line 13d.
I suggest that you read the "Repayments" section in IRS Publication 525. The discussion in Publication 525 calls the itemized deduction "method 1" and the credit "method 2."
