Is K1 Partner an Employee for Testing Purposes

[Rich L. Mayer]

If a partner in a plan receives a K1 which represents a return on an investment and not compensation for services, should he be included in the ADP test? Does it mater on how the partner reported it on the K1 and 1040? If so, when would such partner become an Employee for testing purposes

[rcline46]

The question is not if a K-1 is received, but if any amounts on the K-1 represent earned income rather than passive income.

[austin3515]

More specifically, you're looking for amounts in Box 14A of the K-1.