I don't have an opinion on the amount that makes it worth it.

I advise running several scenarios of nontaxable distributions vs. wages then analyzing those outcomes before making a decision.  Maybe consider 2024 and 2025 if possible.

And, as someone noted earlier, there are impacts on Social Security for different wage amounts. 

It's complicated right, but I think the timing principle is a big consideration:  Does the client save taxes now (and take advantage of that savings with investing it prudently) in order to defer taxes much later?