Where do I enter an amount on DFAS Form 705 in excess of $3,000?

I have a client that received a DFAS Form 705 for $6,398.84 that represents an overpayment they received from the Dept. of Defense during the 2014 calendar year.  According to IRC1341 it can be a credit against tax, a 2% Misc. Deduction, or a Misc. Deduction not subject to 2%.  I don't understand which to use or when.  I do know there is a $3,000 cut off point on the overpayment, which I believe is a 2% Misc. Deduction.

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