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What you can do depends on how the premiums for your wife's LTD insurance were paid.  If your employer paid the premiums for your LTD insurance, your benefits are usually taxable.   Since the benefits had to be repaid, you may be entitled to a tax deduction or credit for the amount repaid.   If you paid the premiums with after-tax dollars, then your benefit would not have been taxable.  In this case, you wouldn't be entitled to any tax relief for the repayment of benefits.     Repayments of Long-Term Disability (LTD) benefits using a Social Security Disability Insurance (SSDI) lump sum are generally reported by adjusting the taxable Social Security income using the lump-sum election method.  Since the repaid amount exceeds $3,000, you can use the Claim of Right to claim an itemized deduction or a tax credit.   To report a lump-sum Social Security payment in TurboTax:   Navigate to the Social Security section  Enter the information from your Form SSA-1099 exactly as shown. On the screen asking, "Did you receive any lump-sum payments for [previous year] or earlier?", select Yes.  Enter the year(s) the payment was for and the corresponding amount for each year as indicated in Box 3.  TurboTax will guide you through entering information from prior-year tax returns if necessary to calculate the tax correctly.  Claim of Right   If you had to repay an amount that you included in your income in an earlier year, you may be able to deduct the amount repaid from your income for the year in which you repaid it. Or, if the amount you repaid is more than $3,000, you may be able to take a credit against your tax for the year in which you repaid it.    If the amount you repaid was more than $3,000, you can deduct the repayment as an other itemized deduction on Schedule A (Form 1040), line 16, if you included the income under a claim of right. This means that at the time you included the income, it appeared that you had an unrestricted right to it. However, you can choose to take a credit for the year of repayment. Figure your tax under both methods and compare the results. Use the method (deduction or credit) that results in less tax.   In other words, you have the choice of taking a deduction for the amount you repaid on Schedule A - Itemized Deduction on your tax return, or taking a credit on your tax return for the amount of tax you paid in prior years on the amount you paid back.     Method 1. Figure your tax for the year of repayment claiming a deduction for the repaid amount.  In TurboTax, go to Deductions & Credits >> Other Deductible Expenses and look for Claim of Right Repayment over $3,000.   Method 2. Figure your tax for the year of repayment claiming a credit for the repaid amount. Follow these steps. Figure your tax for the year of repayment without deducting the repaid amount. Refigure your tax from the earlier year without including in income the amount you repaid in the year of repayment. Subtract the tax in (2) from the tax shown on your return for the earlier year. This is the credit. Subtract the answer in (3) from the tax for the year of repayment figured without the deduction (step 1).   If method 1 results in less tax, deduct the amount repaid. If method 2 results in less tax, claim the credit figured in (3) above on Form 1040 or 1040-SR. The credit is reported on Schedule 3 (Form 1040), line 13 labeled as "IRS 1341".