Towanda Posted May 8 Report Share Posted May 8 The owner of two entities in an affiliated service group earns W-2 income in one entity, and K-1 in the other. His W-2 income is lower than his K-1 income. When I aggregate the entities for 401(a)(4) / Gateway testing, the system (Datair) is disregarding the K-1 income for purposes of testing. This impacts the Gateway minimum for starters. It's the difference between a 5% Gateway and a 4.something% Gateway. The message I get is this: Compensation for 401(a)(4) Discrimination/Gateway Testing differs for sub plans for owners of a sole proprietorship or partnership. Smallest nonzero compensation will be used for testing in the Master Plan. Is this a rule, or is this a shortcoming with Datair? Link to comment Share on other sites More sharing options...
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