Form 8881 Credit for Small Employer Pension Plan Startup Costs, Auto-Enrollment, and Military Spouse Participation

Hi,  Please provide your thoughts on how to answer question 6A of form 8881 to determine the Startup Credits.  Specifically:

Line A seems relatively straighforward. Quote from the IRS Form 8881 instructions:   "Enter the number of employees of the eligible employer who received at least $5,000 of compensation from you during the tax year preceding the first credit year that applies to the small employer plan startup costs credit".  This clearly includes terminated employees and employees earning over $100,000.   

However I am confusd by the IRS Form 8881 line 6A instructions:   "Enter the number of your employees during the tax year preceding the tax year for which the credit is claimed".

With respect to 6A:  How do you count "number of your employees"?   When looking at an annual census, do you only count people employed on 12/31? Or do you add the total of all employees throughout the year including terminated and employees who never met eligiblity/entry (assume fairly high turnover so many more were employed than the company normaly "employes".   Do you count employees with less than $5,000 in that years earnings?   Do you count employees earning over $100,000?

Thank you for this and any additional guidance.

Keith

IRS 401k Tax Credits Form 8881.pdf