There is a notation on line 7 for my 2017 return that says PSQ 3000. My income figure was then reduced by $3000. What does the PSQ stand for?

[pk]

Perhaps Penalty on Savings withdrawal ( qualified ? ) ?  This is the line where adjustments  from schedule 1 are entered and subtracted from line 6 --- I am assuming you are talking about form 1040 line 7

[macuser_22]

I think you mean "PSO"  .

Per the IRS rules:

Public Safety Officers
If you are an eligible retired public safety
officer (law enforcement officer, firefighter,
chaplain, or member of a rescue
squad or ambulance crew), you can elect
to exclude from income distributions
made from your eligible retirement plan
that are used to pay the premiums for
coverage by an accident or health plan
or a long-term care insurance contract.

If you are retired on disability and reporting
your disability pension on line 7,
include only the taxable amount on that
line and enter “PSO” and the amount excluded
on the dotted line next to line 7.

Being in line 7 would indicate that this is a disability pension and you have not yet reached retirement age, otherwise it would be on line 16.

Up to $3,000 can be excluded if it was insurance paid by the plan.

[Anonymous]

line 7 for 2017 is for wages.    are you sure it isn't PSO.  there doesn't appear to be any such thing as PSQ.  if so the notation is on the wrong line 

Insurance Premiums for Retired Public Safety Officers
If you are an eligible retired public safety officer (law enforcement officer, firefighter, chaplain, or member of a rescue squad or ambulance crew), you can elect to exclude from income distributions made from your

eigible retirement plan that are used to pay the premiums for coverage by an accident or health plan You can do this only if you retired because of disability or because you reached normal retirement age. The premiums can be for coverage for you, your spouse, or dependents. The distribution must be from a plan maintained by the employer from which you retired as a public safety officer. Also, the distribution must be made directly from the plan to the provider of the accident or health plan or long-term care insurance contract. You can exclude from income the smaller of the amount of the premiums or $3,000. You can make this election
only for amounts that would otherwise be included in your income. An eligible retirement plan is a governmental plan that is a qualified trust or a section 403(a), 403(b), or 457(b) plan. If you make this election, reduce the otherwise taxable amount of your pension or annuity by the amount excluded. The amount shown in box 2a of Form 1099-R doesn't reflect the exclusion. Report your total distributions on line 16a
and the taxable amount on line 16b. Enter “PSO” next to line 16b.