401(k) Safe Harbor Match Controlled Group

Company A and Company B form a controlled group.  Company A sponsors a safe harbor match 401(k) Plan, which Company B has adopted as a participating employer.  There is one employee, who receives compensation from both entities, but all of the deferrals have been made through Company A.  For purposes of calculating the safe harbor match, I believe I should aggregate the compensation from both companies.  For deduction purposes, should the safe harbor match contribution for this person be divided prorata based on compensation, or should the entire deduction be taken by Company A, since the deferrals were made by the employee from his Company A compensation. 

without looking deeper into it, let's suppose the match had been per payroll. then I think you would have looked at the comp separately, and ultimately only combined comp to see if the person was an HCE. but I am guessing....

I agree that if the plan used the per payroll definition, you would only look at the Company A compensation, but for this plan the compensation definition for the match is for the full plan year, which will require a true up.  The plan is on the Relius volume submitter document, and it does provide that for discretionary PS the allocation will be determined employer by employer, but I am not seeing the same language for the safe harbor match. 

thank you

The deduction should be taken by the company that actually pays the match, which begs the question of who pays. Any plan document that allows adoption by multiple companies, whether in a controlled group or not, needs to have a provision that says which company pays whose contributions. If they file a consolidated return, the location of the deduction shouldn't matter, but unless they have identical ownership who pays for whom will make at least some difference to the shareholders.