wages have to be paid back

I received sickness benefits pay in 2020 from railroad retirement board for agreement benefits. I received and claimed these payments on a w-2 with my 2020 tax return. I am going to be receiving a settlement from the railroad, and the benefits have to be repaid. How do I file and or claim this payment? Will I have to file an amended return, or is there a way to report it on 2021 taxes? It will reduce the actual wages I was paid for 2020 in which I did receive a refund. I also may have to pay back the unemployment benefits paid for which I claimed the $10,000 credit as per the cares act. Any help or suggestions will be greatly appreciated.

I just read Pub 915 which states that I should not have claimed this on my taxes as it was for an injury, but I claimed it anyway as I didn't read that prior to filing my taxes..  :(

After you file

if in a year following the year of receipt the repayment is more than $3,000 you can take as a deduction on schedule A line 16 denote 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 12d denote as IRC 1341.  if the repayment is less than $3,000 you get no tax benefit.

 

 

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After you file

Thanks Mike