Regarding Eligibility and Elective Deferrals
Elective deferrals up to 100% of compensation (“earned income” in the case of a self-employed individual) up to the annual contribution limit – [contribution_total_employee() ] in 2015 and 2016, or [contribution_total_50_or_older() ] in 2015 and 2016 if age 50 or older.
Contribution limits for self-employed individuals:
You must make a special computation to figure the maximum amount of elective deferrals and nonelective contributions you can make for yourself. When figuring the contribution, compensation is your “earned income,” which is defined as net earnings from self-employment after deducting both:
Self-employment income refers to owners whose compensation is reported with a 1099 form, as well as a Schedule C wherein earned income is determined.
If an individual is the owner of corporation (S-corp or otherwise), then the only income they may use for plan compensation is W-2 income.