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@BillM223Thank you so much for your feedback! Your instructions and explanation of both methods creating the same result was very insightful. 

I think the reason my employer doesn’t add these contributions to my W-2 is because since each dollar has to be earned by me hitting the fitness goals, they don’t know what the earned amounts are (because it won’t always be the same). I just don’t understand why they told me not to add these contributions to my return at all. So you think that as long as I add the contributions via either method that you and dmertz mentioned that it shouldn’t cause any issues with my return?