The cushion is part of the maximum deductible contribution. Under IRC 404(o)(3)(A)(i), the business may deduct enough to bring plan assets up to the funding target plus the year's normal cost, plus a cushion of 50% of the funding target. A further amount for expected pay increases can be added, calculated as if today's 415(b) and compensation limits stayed fixed.
The cushion is what lets the maximum pull away from the minimum as a plan matures. Because it is a share of a funding target that grows each year, it grows too, and it gives an owner room to contribute more in a strong year and less in a lean one. Like the rest of the deduction limit, it is calculated with unstabilized segment rates.
The first years of a plan are the unsettled part. IRC 404(o)(4) says that, for a plan with 100 or fewer participants, benefit increases for highly compensated employees from a plan amendment made or effective within the last two years are left out of the cushion. Whether starting a new plan counts as such an increase has not been settled, and the IRS has issued no regulations under 404(o). Maxed's estimates take the conservative reading and leave the owner's benefits out of the cushion until plan year 3. Some practitioners count it from the first year. The enrolled actuary for your plan makes the call.
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