You are ALMOST correct, but not quite.
The additional 20K that you are adding to box 12 DOES appear in Box 5. The compensation deferred to the 401K is subject to medicare. It would also be subject to Social Security if he had not already reached the 147K threshold.
So on his corrected W2 you will add the extra amount into Box 5 which also changes the tax due in box 6, and then you will add the additional entry into box 12.
On the corrected 941 you will add the additional 20K to the medicare taxable income and not the social security income and pay the tax due.
You will also need to adjust your federal 940 to reflect the additional $20,000.
On the 1120S you will add the additional $20K expense to employee benefit programs.
That will reduce the amount of income that passes through on your K-1 by $20,000 so you will change the K-1 entries on your personal return.
That should be everything that you need to do.
@JC_RABC
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