If this is an amount of income you reported and paid tax on in a previous year, you would enter it as an Other Deductible Expense.
You would sign back into your return and select Federal Taxes and Deductions and Credits beneath that.
If you have already been through this section, you'll see a list of deductions and credits that apply to you. The one you want is an uncommon deduction so you would likely have to select that you want to be shown more deductions and credits. Keep going until you see one titled Other Deductible Expenses.
If you haven't been through that section you may be asked to choose what you want to work on after selecting Deductions and Credits and that would be most convenient. If choose what you want to work on, you'll see a longer list of topics. You can then scroll down to the Other Deductions and Credits topic, and select Other Deductible Expenses below that.
Either way, once you're in that interview, you'll come to a screen titled Less Common Expenses. If your repayment was less than $3,000, say Yes. If more than $3,000 say No and continue to the next screen asking about amounts not subject to the 2% limitation. You'll choose that this is a claim of right and enter your amount.
There is another way you can receive a credit for this, rather then a deduction, but you would need to switch to the Desktop/CD product and you would need to do a fairly difficult calculation yourself and enter it on the 1040. It's rarely used, so we don't support doing the calculation and entries for you. If you're interested in that and willing to switch products, let me know and I'll add more instruction on that.
If you're not able to follow my instructions for whatever reason, please post back and I'll see what I can clarify.
