Recoupment of Military SSB Lump Sum

Both of these recoupments are Claims of Right.  Since the income was originally taxed (even though it was in 1994), the repayment of the income creates  "negative taxable income" as it were, because this income was originally included as taxable income and now it has all been reclaimed.  Hopefully you were able to claim the original 22,000 on a tax return in the year it was recouped as either a deduction or a credit.  If you did not, and the reclaim was made in 2017 or later, you may still do so through an amended return.  Please feel free to reach out if that's the case.

Regardless, the recoupment of the $8593 also qualifies for this treatment.  Why?  Because when you claimed your Lump Sum as income in 1994, you would not have claimed $22097 of income but rather the full $30690.   However, since this $8593 was recouped in a separate year from the $22097, that Claim of Right repayment will need to be claimed in the Tax Year in which the amount is recouped (either 2019 or 2020).

The IRS allows you to either claim a deduction (really only effective if you are able to itemize, but will be much simpler to claim), or a credit.  For the credit, you would have to go back to your 1994 tax return to figure out how much tax savings reducing your income by $8593 would have.  (The same would be true of the $22097 if it was all repaid in the same year and you still can claim the repayment on a tax return.  The major difference is that it is more likely you will get a fuller deduction for the $22097, whereas the $8593.  You would not actually need to amend the 1994 return (the IRS would not accept it anyways), but you would need to know the tax effect on the return if you choose the credit.  Otherwise, since the amount is over $3000, you may also elect to take the deduction.  The following Help Article describes how to file using both techniques in TurboTax:  What is a claim of right repayment? - TurboTax