110 STAT. 2038 PUBLIC LAW 104-191—AUG. 21, 1996 first day of such month, 75 percent of the annual deductible under such coverage. "(3) SPECIAL RULE FOR MARRIED INDIVIDUALS.— In the case of individusds who are married to each other, if either spouse has family coverage— "(A) both spouses shall be treated as having only such family coverage (and if such spouses each have family coverage under different plans, as having the family coverage with the lowest annual deductible), and "(B) the limitation under paragraph (1) (after the application of subparagraph (A) of this paragraph) shall be divided equally between them unless they agree on a different division. " (4) DEDUCTION NOT TO EXCEED COMPENSATION.— "(A) EMPLOYEES.— The deduction allowed under subsection (a) for contributions as an eligible individual described in subclause (I) of subsection (c)(l)(A)(iii) shall not exceed such individual's wages, salaries, tips, and other employee compensation which are attributable to such individual's employment by the employer referred to in such subclause. "(B) SELF-EMPLOYED INDIVIDUALS.—The deduction allowed under subsection (a) for contributions as an eligible individual described in subclause (II) of subsection (c)(l)(A)(iii) shall not exceed such individual's earned income (as defined in section 401(c)(1)) derived by the taxpayer from the trade or business with respect to which the high deductible health plan is established. "(C) COMMUNITY PROPERTY LAWS NOT TO APPLY.— The limitations under this paragraph shall be determined without regard to community property laws. "(5) COORDINATION WITH EXCLUSION FOR EMPLOYER CON- TRIBUTIONS. —No deduction shall be allowed under this section for 2iny amount psdd for any taxable year to a medical savings account of an individual if— "(A) any amount is contributed to any medical savings account of such individual for such year which is excludable from gross income under section 106(b), or "(B) if such individual's spouse is covered under the high deductible health plan covering such individual, any amount is contributed for such year to any medical savings account of such spouse which is so excludable. "(6) DENIAL OF DEDUCTION TO DEPENDENTS.—No deduction shall be allowed under this section to any individual with respect to whom a deduction under section 151 is allowable to another taxpayer for a taxable year beginning in the csdendar year in which such individual's taxable year begins. "(c) DEFINITIONS. —For purposes of this section— "(1) ELIGIBLE INDIVIDUAL. — "(A) IN GENERAL.—The term 'eligible individual' means, with respect to any month, any individual if— "(i) such individual is covered under a high deductible health plan as of the 1st day of such month, "(ii) such individual is not, while covered under a high deductible health plan, covered under any health plan—
�
