Page:United States Statutes at Large Volume 100 Part 3.djvu/609

 PUBLIC LAW 99-514—OCT. 22, 1986

100 STAT. 2417

408(i) (relating to reports) is amended to read as follows: "The reports required by this subsection— "(1) shall be filed at such time and in such manner as the Secretary prescribes in such regulations, and "(2) shall be furnished to individuals— "(A) not later than January 31 of the calendar year following the calendar year to which such reports relate, and "(B) in such manner as the Secretary prescribes in such regulations." (f) CONFORMING AMENDMENT.—Section 219(f) (relating to definitions and special rules) is amended by adding at the end thereof the following new paragraph: "(7) ELECTION NOT TO DEDUCT CONTRIBUTIONS.— "For election not to deduct contributions to individual retirement plans, see section 408(o)(2)(B)(ii)." (g) EFFECTIVE DATE.—The amendments made by this section shall

apply to contributions and distributions for taxable years beginning after December 31, 1986. SEC. 1103. SPOUSAL DEDUCTION ALLOWED WHERE SPOUSE HAS SMALL AMOUNT OF EARNED INCOME.

(a) IN GENERAL.—Subparagraph (B) of section 219(c)(l) (relating to special rules for certain married individuals) is amended to read as follows: "(B) whose spouse— "(i) has no compensation (determined without regard to section 911) for the taxable year, or "(ii) elects to be treated for purposes of subsection (b)(l)(B) as having no compensation for the taxable year," (b) EFFECTIVE DATE.—The amendment made by this section shall apply to taxable years beginning before, on, or after December 31, 1985. Subpart B—Other Provisions SEC. 1105. $7,000 LIMITATION ON ELECTIVE DEFERRALS.

(a) GENERAL RULE.—Section 402 (relating to taxability of beneficiary of employees' trust) is amended by adding at the end thereof the following new subsection: "(g) LIMITATION ON EXCLUSION FOR ELECTIVE DEFERRALS.—

"(1) IN GENERAL.—Notwithstanding subsections (a)(8) and (h)(l)(B), the elective deferrals of any individual for any taxable year shall be included in such individual's gross income to the extent the amount of such deferrals for the taxable year exceeds $7,000. "(2) REQUIRED DISTRIBUTION OF EXCESS DEFERRALS.—

"(A) IN GENERAL.—If any amount (hereinafter in this paragraph referred to as 'excess deferrals') is included in the gross income of an individual under paragraph (1) for any taxable year— "(i) not later than the 1st March 1 following the close of the taxable year, the individual may allocate the amount of such excess deferrals among the plans under which the deferrals were made and may notify each such plan of the portion allocated to it, and

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