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FACTS: ABC is an S-Corp owned 100% by Mr. A ABC sponsors a Safe Harbor 401k (Cross Tested) Profit Sharing Plan: 2 HCEs are elig 10 NHCEs are elig ABC 401kPSP excludes employees of Affiliated Employers who have not adopted the Plan; Eligibility is 1 Year of Service with 1000 hours (no min age); Years of Service with Affiliated Employers are counted for plan purposes Maryland LLC is a multimember LLC taxed as a partnership 5% membership interest: Mr A 95% membership interest: Partnership Z (2 partners, both of whom are unrelated to Mr. A) At 1/1/2016 the membership interest changed when Partnership Z wanted to close down. In response to this, Mr A acquired 90% of the partnership's interest via an assignment of interest Mrs A (Mr A's wife) acquired 5% of the partnership's interest via an assignment of interest As a result of this change in LLC membership , Maryland LLC and ABC Corp are now under common control as of 1/1/2016 Mr. A hired an outside person (unrelated) to manage the day to day LLC operations as he simply does not have the time to do it. There are 5 LLC employees (all NHCEs), 3 of whom are very very part time (never 1000 hours), the other 2, John and Jane, may or may not work 1000 hours in a year for LLC however they are also employed by ABC Corp and have had at least 1000 hours credited per year with ABC Corp. These 2 employees are 2 of the 10 NHCE Participants in the ABC Plan. They both receive 2 separate W2s -- 1 for ABC Corp, 1 for LLC QUESTIONS: How do the 2 "shared" employees, John and Jane, count in the 410b test? Assuming the 3 very part time employees of LLC never have 1000 hours, they will never meet eligibility for 410b testing, BUT, the 2 shared employees, John and Jane, have >12mos, 1000 hours and are eligible for the ABC Corp plan (i.e. they are active participants), yet excluded as far as their LLC employment is concerned. So would the NHC coverage be 10/12 essentially counting them as 1 person each in the numerator but counting them as 2 people each in the denominator (1 as ABC ee, 1 as LLC ee)?? I realize it will pass either way, but next year the LLC #s may increase. Mr. A and his wife are eligible for the ABC Plan, yet assuming they have compensation from the LLC, that portion of their work/compensation is excluded from the plan. How does question #1 apply to them? Does the LLC compensation that is excluded for allocation purposes have to be tested for reasonableness, to prove the exclusion is not discriminatory? or does the LLC compensation have to be included for allocation purposes, i.e. added to their ABC Corp compensation for allocation purposes (SH, TH Min, PS)? Presuming the LLC Compensation is excludable, is 401(a)(4) testing done only with respect to ABC Corp compensation? or is the LLC compensation added in for Avg Ben, Rate Group testing purposes? Thank you!