Definition of Compensation in Plan Document

[Alex Daisy]

I am reading a Plan Documument that defines compensation as "W-2" Compensation.

"Testing Compensation" means wages within the meaning of Code section 3401(a) and all other payments of compensation to an Employee by the Employer (in the course of the Employer's trade or business) for which the Employer is required to furnish the Employee a written statement under Code sections 6041(d), 6051(a)(3), and 6052. Testing Compensation must be determined without regard to any rules under Code section 3401(a) that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Code section 3401(a)(2)). For any Self-Employed Individual, Testing Compensation shall mean Earned Income.

Can someone explain to me what Box on a W-2 I should be looking at?

And if the participant made any Employee Deferrals, should they be included in the definition of Comp?

Any help would be greatly appreciated.

ALEX

[austin3515]

10 to 1 the next paragraph says you should add back pre-tax defrrals under 401(k), etc.

So you could either:

1) Start with box 1 and add back 401(k) deferrals and 125 contributions. OR

2) Start with medicare wages and add back 125 contriubtions (125 deferrals reduce Medicare wages).