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How about the amount that the State’s law counts as income? Or the amount that results from following the State’s law, regulations, guidance, or withholding instructions? Either of those might differ from either of the amounts you describe. And could vary for each State’s law. Under (at least) Alabama’s, New Jersey’s, and Pennsylvania’s law, withholding might vary regarding the portion of a distribution that (if not excluded as old-age retirement income) is treated as a return of previously taxed income. Under Pennsylvania’s law, old-age retirement income is excluded from income. Under New York’s law, some kinds of retirement income might be excluded from income, up to a limited amount. This is not advice to anyone. If my response is a winner, please send my cookie to the Bakers.

State withholding is determined by state law and can vary from state to state. I know some states essentially adopted the federal tax code with respect to definitions, e.g. wages and gross income, and I suspect most states do. How many cookies do you available to award?

Forget the SEP. Anything you can contribute to a plan that is NOT the DB plan can be contributed to the PS/401(k) plan. If you are NOT contributing the DB plan for the year, your contribution to the PS plan can be greater than 6%. You really need to have this discussion with the entity that helps you with your PS/401(k) plan. They should know the rules and be willing to discuss them with you.