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.
Please refer to IRS Publication 525, page 34, under the section titled "Repayments" for additional information.
To enter the credit into the TaxAct program:
The text "IRC 1341" will appear next to Schedule 3 (Form 1040) Additional Credits and Payments, Line 13 when the return is printed.
Note that any link in the information above is updated each year automatically and will take you to the most recent version of the webpage or document at the time it is accessed.