Nash was reimbursed in 2022 by his insurance company for a medical expense that he had previously deducted on his 2021 Schedule A (Form 1040), Itemized Deductions. What is the tax treatment of the recovered medical expense, if any?

The amount recovered is not taxable and should not be included on the 2022 return.

The amount recovered should be deducted on Schedule A (Form 1040), Itemized Deductions, as a medical expense again in 2022.

The recovery is includable in income in the year received up to the amount by which the deduction or credit claimed reduced taxes in the prior year.

The 2021 return must be amended to remove the medical expense that was recovered