Thank you, AmyC.
Your answer #1 - to include the vacation payout amount on 1040 line 1a - is how I currently have my 1040 form filled out. (It also aligns with the IRS form 1040 instructions, which say to use schedule 1 to report income that can't be entered directly on Form 1040.)
Could you please clarify answer #2? It seems to conflict with answer #1. (Taking money "out" is tied to a "yes" answer in TurboTax, which generates a schedule 1 form and shows the amount as additional income on line 8t. In which case, the amount would need to be subtracted from 1040 line 1a to avoid double taxation, because the amount is already included in box 1 and isn't additional income. Putting money "in" is tied to a "no" answer in TurboTax, which keeps the amount on 1040 line 1a and doesn't generate a schedule 1 form.)
