110 STAT. 1802 PUBLIC LAW 104-188—AUG. 20, 1996 part by any of the foregoing may include a qualified cash or deferred arrangement as part of a plan maintained by the employer.. 26 USC 401 note. (b) EFFECTIVE DATE.— The amendment made by this section shall apply to plan years beginning after December 31, 1996, but shall not apply to any cash or deferred arrangement to which clause (i) of section 1116(f)(2)(B) of the Tax Reform Act of 1986 applies. SEC. 1427. HOMEMAKERS ELIGIBLE FOR FULL IRA DEDUCTION. (a) SPOUSAL IRA COMPUTED ON BASIS OF COMPENSATION OF BOTH SPOUSES.— Subsection (c) of section 219 (relating to special rules for certain married individuals) is amended to read as follows: " (c) SPECIAL RULES FOR CERTAIN MARRIED INDIVIDUALS. — "(1) IN GENERAL.— In the case of an individual to whom this paragraph applies for the taxable year, the limitation of paragraph (1) of subsection (b) shall be equal to the lesser of— "(A) the dollar amount in effect under subsection (b)(1)(A) for the taxable year, or "(B) the sum of— "(i) the compensation includible in such individual's gross income for the taxable year, plus "(ii) the compensation includible in the gross income of such individual's spouse for the taxable year reduced by the amount allowed as a deduction under subsection (a) to such spouse for such taxable year. "(2) INDIVIDUALS TO WHOM PARAGRAPH CD APPLIES. —Paragraph (1) shall apply to any individual if— "(A) such individual files a joint return for the taxable year, and "(B) the amount of compensation (if any) includible in such individual's gross income for the taxable year is less than the compensation includible in the gross income of such individual's spouse for the taxable year.. (b) CONFORMING AMENDMENTS.— (1) Paragraph (2) of section 219(f) (relating to other definitions and special rules) is amended by strilang "subsections (b) and (c)" and inserting "subsection (b)". (2) Section 219(g)(1) is amended by striking "(c)(2)" and inserting "(c)(1)(A)". (3) Section 408(d)(5) is amended by striking "$2,250" and inserting "the dollar amount in effect under section 219(b)(1)(A)". 26 USC 219 note. (c) EFFECTIVE DATE.— The amendments made by this section shall apply to teixable years beginning after December 31, 1996. CHAPTER 3—NONDISCRIMINATION PROVISIONS SEC. 1431. DEFINITION OF HIGHLY COMPENSATED EMPLOYEES; REPEAL OF FAMILY AGGREGATION. (a) IN GENERAL. —Paragraph (1) of section 414(q) (defining highly compensated employee) is amended to read as follows; "(1) IN GENERAL.— The term highly compensated employee' means any employee who— "(A) was a 5-percent owner at smy time during the year or the preceding year, or
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