Participating Employers, employees and deferrals

An employee of a participating employer in a plan gets a W-2 and defers on it.  They are also a partner in the other participating employer and have a large  net loss.  Do I have to net the two incomes and show them with a loss for the plan purposes?  They did defer on their wages.   

Pammie57, this basic fact pattern has been the subject of a couple of different posts recently. The consensus was that (a) there is no guidance on the issue, (b) most comments thought you should net, and (c) there was a minority view (held by me, among possibly others) that you did not need to net. It may to some extent be driven by the wording of your plan with respect to the definition of compensation and self-employment income, and how multiple adopting employers are treated.

You follow the plan's terms to develop plan compensation.  AOK to ignore loss if supported by plan documents.

However, 415 comp includes all aggregated employers so that might end up forcing comp to be limited.