Under which condition can all employer matching contributions satisfy the definition of QMACs and eliminate the ACP test?

For employer matching contributions to satisfy the definition of Qualified Matching Contributions (QMACs) and thereby eliminate the need for the Actual Contribution Percentage (ACP) test, it's essential to consider the relationship between matching contributions and employee contributions.

When all after-tax contributions are removed from the plan, this ensures that any contributions made to the plan are exclusively from pre-tax elective deferrals and employer matching contributions. Since QMACs are designed to support non-discrimination requirements and facilitate compliance, their definition specifically excludes after-tax contributions. By eliminating after-tax contributions, it enhances the clarity and simplicity of the matching contributions’ compliance status.

In this scenario, where removal of after-tax contributions occurs, all employer matching contributions can meet the criteria for QMACs. This is critical because if the matching contributions qualify as QMACs, it allows the plan to bypass the ACP test, simplifying the plan administration and reducing compliance burdens.

The other options do not adequately address the qualifications necessary for matching contributions to be categorized as QMACs, and therefore, do not provide the conditions needed to eliminate the ACP test.