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You should probably do your own estimate. This might help: https://www.irs.gov/individuals/tax-withholding-estimator

The PPP money can be physically used for anything you want. If you are really asking if matching contributions to your plan will qualify for the compensation component (the current 75% minimum requirement) for forgiveness, the best answer at this point is yes! We are awaiting official rules, but they clearly allowed 100% of the 2019 employer contribution to be used for the calculation of the PPP amount. Also, it appears that ANYTHING contributed in the 8 week period to the plan (employer contribution) will count for the reimbursement, not just what is applicable to the 8 week period or a pro rata amount of the annual amount. So, it appears that if you fund the whole year's expected contribution in the 8 week period, it will all count.

I think pre-approved plans (at least FT William) have built these is already. The FTW one is written such that an employer may grant such relief, presumably by a resolution to "activate" the provision. So there is still a decision and paperwork required but not necessarily an amendment. I'm not expressing an opinion as to whether this is or is not the best way to handle, just communicating how it had been explained to me and how I understand it. The issue is that COVID-19 is considered a national (health) emergency rather than a natural disaster and so had to be specifically legislated (CARES Act) for relief.

IMHO, I would never recommend a sponsor adopt such provisions; too many unknowns. "Prediction is very difficult, especially about the future." Niels Bohr

As alluded to by Larry, this is likely a misunderstanding and/or miscommunication by/between the advisor and you. As he also pointed out this is likely a distinction without a difference. Important considerations: While some might think it is semantics, there is no monolithic $62K limit for 2019. There is a a $19K employee deferral limit, a $56K annual addition limit and a $6K catch-up contribution limit if and only if the applicable employee deferral limit is reached. Employer contributions are limited to 25% of the plan's compensation, but is calculated as 20% of a self-employed individual's net earnings from self-employment (business profit - 1/2 SE tax). The annual addition limit does not apply to any catch-up contributions Therefore, only ($56K - $19K = $37K) / 20% = $185K in net earnings from self-employment is required to make the maximum employee deferral, maximum employer contribution and maximum catch-up contribution for a total of $62K in total contributions. This is why Larry said that it might not matter. Of course providing the correct contributions are made. Notwithstanding the above, since the client is >= age 50. They could make greater retirement plan contributions in the future with a paired 401k/defined benefit plan. They would need to have reasonably stable net earnings from self-employment for a minimum of five years. So maybe this isn't the year to start thinking about doing it. However, it might be an option for the future.

I'll save (what I think is) the obvious question for your second post; here, the answer is "apply the document language". It clearly says Plan A is the plan to be LIMITED. Plan B is NOT Limited. I do have one problem with your math: X + Y CAN'T be greater than Z since X is (by definition) limited. If you meant to say "if not limited, X + Y is greater than Z", then you have a correct statement. Since X is plan A's benefit, X is limited to the maximum (Z) minus the plan B accrual (Y). Noting that we have not seen the actual language of the plans, I would say you have made the correct interpretation and since that is CORRECT, by definition nothing else would be a correct interpretation.

I don't think that works. Even if you are doing daily testing, you still determine whether or not the employee is benefiting based on whether or not they satisfied the conditions to receive a contribution for the year. There is not a lot to go on, but here is what it says in 1.410(b)-8: (a) Testing methods—(1) In general. A plan must satisfy section 410(b) for a plan year using one of the testing options in paragraphs (a)(2) through (a)(4) of this section. Whichever testing option is used for the plan year must also be used for purposes of applying section 401(a)(4) to the plan for the plan year. The annual testing option in paragraph (a)(4) of this section must be used in applying section 410(b) to a section 401(k) plan or a section 401(m) plan, and in applying the average benefit percentage test of §1.410(b)-5. For purposes of this paragraph (a), the plan provisions and other relevant facts as of the last day of the plan year regarding which employees benefit under the plan for the plan year are applied to the employees taken into account under the testing option used for the plan year. For this purpose, amendments retroactively correcting a plan in accordance with §1.401(a)(4)-11(g) are taken into account as plan provisions in effect as of the last day of the plan year. (2) Daily testing option. A plan satisfies section 410(b) for a plan year if it satisfies §1.410(b)-2 on each day of the plan year, taking into account only those employees (or former employees) who are employees (or former employees) on that day. (3) Quarterly testing option. A plan is deemed to satisfy section 410(b) for a plan year if the plan satisfies §1.410(b)-2 on at least one day in each quarter of the plan year, taking into account for each of those days only those employees (or former employees) who are employees (or former employees) on that day. The preceding sentence does not apply if the plan's eligibility rules or benefit formula operate to cause the four quarterly testing days selected by the employer not to be reasonably representative of the coverage of the plan over the entire plan year. (4) Annual testing option. A plan satisfies section 410(b) for a plan year if it satisfies §1.410(b)-2 as of the last day of the plan year, taking into account all employees (or former employees) who were employees (or former employees) on any day during the plan year. (5) Example. The following example illustrates this paragraph (a). Example. Plan A is a defined contribution plan that is not a section 401(k) plan or a section 401(m) plan, and that conditions allocations on an employee's employment on the last day of the plan year. Plan A is being tested for the 1995 calendar plan year using the daily testing option in paragraph (a)(2) of this section. In testing the plan for compliance with section 410(b) on March 11, 1995, Employee X is taken into account because he was an employee on that day and was not an excludable employee with respect to Plan A on that day. Employee X was a participant in Plan A on March 11, 1995, was employed on December 31, 1995, and received an allocation under Plan A for the 1995 plan year. Under these facts, Employee X is treated as benefiting under Plan A on March 11, 1995, even though Employee X had not satisfied all of the conditions for receiving an allocation on that day, because Employee X satisfied all of those conditions as of the last day of the plan year.

In the official Interim Final Rules they told us how to calculate EXACTLY the amount to request, and for a sole prop they took the employer contribution off of the Schedule C (the whole amount). Do you need me to find that for you? I'm sure I can. And yes, it APPEARS that it is just that simple; we are advising clients to WAIT until they are six weeks into their 8 weeks with the hope that we will have more official guidance. And there is talk right now of making changes in the PPP, like making it 16 weeks, or making it some period of time AFTER the business is allowed to open up, or changing the percentage to 50/50 instead of 75/25, and a whole bunch of other ideas. No one knows for sure where it is going, but we are not seeing anything that would NOT count a BIG DB contribution toward the 75% rule ( in fact, all by itself, it very well could be 100% in the right circumstances).

Bill, I agree, which is why I said one of two legal issues would be not following your plan document. I guess the question is, if this answer is obvious to just about everyone (and it did not seem to me to be so in the early stages of this thread, but I may have misinterpreted some posts), then that's it. If there is a significant minority of folks who do it the other way, then there may be a need for guidance.

If you want to do a PS, you could use the ABT to pass coverage if the demographics are suitable.

Exclude HCE Discretionary match: hourly get match 1, salaried get match 2. Automatically passes BRF and ACP. But if the owner does not want to get a match, is it worth it to even have a plan and pay $1,500/yr TPA cost (plus carrier fees) with less than $2000 ER contributions? How much are those NHCE EE's deferring? Maybe a SH Match? is that person (hourly) making $30k a year deferring a lot?

An Eligible Retirement Plan refers to the definition in 402(c)(8)(B), which includes a qualified trust. It appears that as long as a DB participant is otherwise eligible for a distribution, up to $100,000 of that distribution can be treated as a CRD. sec, 2202 (a)(4)(C) 4-16-2020 addition: The published analyses are either ignoring the question or saying DB plans aren't included. Who am I to argue? However, I agree with Larry Starr that the plan perhaps cannot treat the distribution as a CRD but the participant may do so on his tax return. (someday I'll learn how to insert links and stuff for reference)