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It sounds like the K-1 is issued to the partner's corporation, NOT the partner. The K-1 is not plan comp. This is not an uncommon setup, but its also often misunderstood. Based on the scenario you lay out, his comp for plan purposes is his W-2 from the corporation, not the K-1 from the partnership to the corporation. If the income passes from one entity to another (not taxed as income from self-employment), why would it count as plan comp?

Agreed. If the income does not flow through to Schedule SE (which references K1 box 14) and is not subjected to SECA taxes then it cannot be earned income from self-employment.

You may want to call Schwab and ask them on what tax form are they going to report the payment and who will be the payer, or just wait until next January to see what they send to you. You could then treat it on your tax return in a manner consistent with the Schwab information. In the meantime, have a wonderful lunch (or champagne brunch)!

What's the difference between true love and retirement plan paperwork? Retirement plan paperwork is forever...

@TH 401k The compliance question is worded somewhat awkwardly which leads to overthinking how to respond. There really are three questions to ask yourself: Was the plan combined with another plan to pass coverage? Was the plan combined with another plan to pass nondiscrimination? Were any combinations done using the permissive aggregation rules? If you answer yes, yes and yes, check yes. Otherwise, check no. Note that a plan fails 401(a)(4) if it is subject to ADP or ACP testing and - uncorrected - fails either test. The IRS added this question to the 5500 to "improve tax oversight and compliance of tax-qualified retirement plans." They are collecting data about the use of permissive aggregation to see if this a topic to target in their compliance reviews.

The requirement is that if you aggregate plans to satisfy coverage you must also satisfy nondiscrimination testing (ADP, ACP and/or general 401(a)(4) as applicable) for that aggregated "plan" and vice versa. In both instances you describe you would check yes.

And all the wonderful memories...

I just got the check. It's made "To The Order Of: XXX LLC 401(k) Plan"! I'll have to call Schwab to see WTH I'm supposed to do with that. XXX LLC shut down 2020. All bank, brokerage accounts closed as well. I mean, I thoroughly killed and cremated everything. Nothing remains but the obituary.

Partially baked thoughts: If the order restricts what the plan would allow, the plan probably does not want to have to make a special case for the order and treat it differently or increase its monitoring. If the plan allows beneficiaries to to name beneficiaries (e.g. if alternate payee is allowed under plan terms to have an interest in the form of a J&S annuity, but the order says no new spouse can be named as contingent beneficiary), the plan probably does not want the extra administrative burden of determining if the named contingent annuitant is a new spouse (or whoever else may be disallowed by the order). The plan would want to follow the terms of any QDRO, so the plan would probably elect not to qualify the order, which it could rightfully do because the order would impose terms on the plan that are inconsistent with how the plan is designed to provide benefits.

Mandamus is not available to direct a private party to a legal proceeding (e.g. the two individuals in a divorce) to take action. Mandamus is for directing a lower court, a public official, or a public administrative entity to perform its prescribed duty. I doubt that mandamus is appropriate to force a private employer plan to determine whether or not a domestic relations order is a qualified domestic relations order. Mandamus is a pretty cool word, though. It also has a very distinguished role in United States jurisprudence: Marbury v. Madison.

Have you considered IRC 414(p)(4)(A)(iii)?

Sorry for your situation. A couple of things, though. First, the parties don't need to "agree" on a QDRO. It is an order of the Court - and if the divorce was granted with a settlement of retirement plan rights, the judge can issue that order (a QDRO) without the parties doing anything to agree to it (you've already agreed to the amount and terms - the QDRO is a mechanism under federal law to actually get at retirement plan assets). It may be customary for the parties to agree (and at times easier to get a judge to sign it if they do), but it is not required. Second, your ex does NOT need to provide the data indicated in your original post. The plan probably has that info (it really should as a matter of federal law) - and as part of the plan's review of the QDRO, they will determine the amount - if it is based on a formula (like, 50% of the amount of increase between dates of marriage and divorce). If you provide the dates, the plan (through either the recordkeeper, or the Plan Administrator) should be able to figure it out. If they can't (change in employer through a merger or acquisition, or change in recordkeeper), then you can approximate the amount, and have the order changed to a specified dollar amount (rather than a formula). Finally, if your ex is truly necessary and still recalcitrant, the judge can 1) order them to not do anything with the plan assets until the issue is resolved; 2) hold them in contempt; and/or 3) penalize them, but simply awarding you the whole thing (rare, but I've seen it happen). In any event, someone needs to get to the judge to "enforce that which was already ordered/agreed to." If not your attorney, then write a letter to the judge asking that the matter be reopened and reheard (and file a complaint with the local or state bar association responsible for attorney discipline). Domestic relations judges are used to that....