you do not have to designate it repayment but you have to let the financial institution know what you are doing.
If you contribute for 2020, or for 2021, you must have sufficient compensation to allow that.
if you want to deduct it, you must be under the income limits.
if you take out and then contribute the same deductible amount, in other words, nothing happened..
it only works because the 10% penalty is waived in 2020.
It is not a loophole.
