,,ii  #aae? ,,congress  #b;d ,session   
,s4 #bdif  ,,9 ,,! ,,s5ate ,,( ,,!      
,,unit$ ,,/ates  ,m>* #e1 #bjah ,mr4    
,enzi introduc$ ! foll[+ bill2 :i* 0    
read twice & ref]r$ to ! ,committee on  
,f9ance  ,a ,,bill  ,to am5d ! ,int]nal 
,rev5ue ,code ( #aihf to e/abli% ,small 
,bus9ess ,heal? ,acc\nts4  #a4 ,%ort    
title  ,?is ,act may be cit$ z ! ,small 
,bus9ess ,heal? ,acc\nt ,act ( #bjah4   
#b4 ,small ,bus9ess ,heal? ,acc\nts  7a7
 ,9 g5]al ,"p ,,viii ( sub*apt] ,b (    
*apt] #a ( ! ,int]nal ,rev5ue ,code (   
#aihf is am5d$ by r$esignat+ section    
#bbd z section #bbe & ins]t+ aft]       
section #bbc ! foll[+ new section3      
#bbd4 ,small ,bus9ess ,heal? ,acc\nts   
7a7 ,d$uction all[$ ,9 ! case ( an      
individual :o is an eligible individual 
= any mon? dur+ ! taxable ye>1 !re %all 
be all[$ z a d$uction = ! taxable ye> an
 am\nt equal to ! aggregate am\nt paid 9
 ca% dur+ su* taxable ye> by or on      
behalf ( su* individual to a small      
bus9ess heal? acc\nt ( su* individual4  

7b7 ,limitations  7#a7 ,9 g5]al ,! am\nt
 all[able z a d$uction "u subsection 7a7
 to an individual = ! taxable ye> %all n
 exce$ ! sum ( ! mon?ly limitations =   
mon?s dur+ su* taxable ye> t !          
individual is an eligible individual4   
7#b7 ,mon?ly limitation ,! mon?ly       
limitation = any mon? is #a_/ab (-- 7,a7
 9 ! case ( an eligible individual :o is
 n describ$ 9 subp>agraph 7,b71 #c1djj1 
or  7,b7 9 ! case ( an eligible         
individual :o is a head ( a h\sehold or 
m>ri$ 7)9 ! mean+ ( section #ggjc7 &    
fil+ a jo9t return "u section #fjac = ! 
taxable ye>1 #f1gej4  7#c7 ,additional  
contributions = individuals #ee or old] 
,9 ! case ( an individual :o has atta9$ 
age #ee be=e ! close ( ! taxable ye>1 ! 
applicable limitation "u subp>agraphs   
7,a7 & 7,b7 ( p>agraph 7#b7 %all be     
increas$ by #a1jjj4  7#d7 ,coord9ation )
 o!r contributions  7,a7 ,9 g5]al ,!    
limitation :i* w\ld 7b = ?is p>agraph7  
apply "u ?is subsection to an individual
 = any taxable ye> %all be r$uc$ 7b n   

bel[ z]o7 by ! sum (--  7i7 ! aggregate 
am\nt paid = su* taxable ye> to ,ar*]   
,m,s,as ( su* individual1  7ii7 !       
aggregate am\nt contribut$ to small     
bus9ess heal? acc\nts ( su* individual  
:i* is excludable f ! taxpay]'s gross   
income = su* taxable ye> "u section     
#ajf7;d7 7& su* am\nt %all n be all[$ z 
a d$uction "u subsection 7a771 &  7iii7 
! aggregate am\nt contribut$ to small   
bus9ess heal? acc\nts ( su* individual =
 su* taxable ye> "u section             
#djh7;d77#aj7 7& su* am\nt %all n be    
all[$ z a d$uction "u subsection 7a774  
7,b7 ,exception ,subp>agraph 7,a77i7    
%all n apply ) respect to any individual
 to :om p>agraph 7#e7 applies4  7#e7    
,special rule = m>ri$ individuals ,9 !  
case ( individuals :o are m>ri$ to ea*  
o!r1 ! limitation "u p>agraph 7#a7 7)\t 
reg>d to any additional contribution    
am\nt "u p>agraph 7#c77--  7,a7 %all be 
r$uc$ by ! aggregate am\nt paid to ,ar*]
 ,m,s,as ( su* sp\ses = ! taxable ye>1 &
  7,b7 aft] su* r$uction1 %all be divid$

 equally betwe5 !m unless !y agree on a 
diff]5t division4  7#f7 ,d5ial (        
d$uctions to dep5d5ts ,no d$uction %all 
be all[$ "u ?is section to any          
individual ) respect to :om a d$uction  
"u section #aea is all[able to ano!r    
taxpay] = a taxable ye> beg9n+ 9 !      
cal5d> ye> 9 :i* su* individual's       
taxable ye> beg9s4  7#g7 ,m$ic>e        
eligible individuals ,! limitation "u   
?is subsection = any mon? ) respect to  
an individual %all be z]o = ! fir/ mon? 
su* individual is entitl$ to b5efits "u 
title ,,xviii ( ! ,social ,security ,act
 & = ea* mon? !reaft]4  7#h7 ,increase 9
 limit = individuals becom+ eligible    
individuals aft] ! beg9n+ ( ! ye>  7,a7 
,9 g5]al ,= purposes ( comput+ !        
limitation "u p>agraph 7#a7 = any       
taxable ye>1 an individual :o is an     
eligible individual dur+ ! la/ mon? (   
su* taxable ye> %all be treat$ z hav+   
be5 an eligible individual dur+ ea* ( ! 
mon?s 9 su* taxable ye>4  7,b7 ,failure 
to ma9ta9 eligibility  7i7 ,9 g5]al ,if1

 at any "t dur+ ! te/+ p]iod1 !         
individual is n an eligible individual1 
!n-- 7,i7 gross income ( ! individual = 
! taxable ye> 9 :i* occurs ! fir/ mon? 9
 ! te/+ p]iod = :i* su* individual is n 
an eligible individual is increas$ by ! 
aggregate am\nt ( all contributions to !
 small bus9ess heal? acc\nt ( !         
individual :i* c\ld n h be5 made b =    
subp>agraph 7,a71 &  7,,ii7 ! tax impos$
 by ?is *apt] = any taxable ye> on !    
individual %all be increas$ by #aj p]c5t
 ( ! am\nt ( su* increase4  7ii7        
,exception = disability or dea?         
,subclauses 7,i7 & 7,,ii7 ( clause 7i7  
%all n apply if ! individual ceas$ to be
 an eligible individual by reason ( !   
dea? ( ! individual or ! individual     
becom+ disabl$ 7)9 ! mean+ ( section    
#gb7m77#g774  7iii7 ,te/+ p]iod ,! t]m  
te/+ p]iod means ! p]iod beg9n+ ) ! la/ 
mon? ( ! taxable ye> ref]r$ to 9        
subp>agraph 7,a7 & end+ on ! la/ day ( !
 twelf? mon? foll[+ su* mon?4  7c7      
,def9itions & special rules ,= purposes 

( ?is section-- 7#a7 ,ar*] ,,msa ,! t]m 
,ar*] ,,msa has ! mean+ giv5 su* t]m 9  
section #bbj7;d74  7#b7 ,eligible       
individual ,! t]m eligible individual   
means1 ) respect to any mon?1 any       
individual if-- 7,a7 su* individual is  
employ$ by a small bus9ess1 &  7,b7     
except z provid$ "u subsection          
7f77#e77;,b71 no ca% has be5 paid dur+  
su* mon? by or on behalf ( su*          
individual to a heal? sav+s acc\nt "u   
section #bbc4  7#c7 ,small bus9ess ,!   
t]m small bus9ess means a small bus9ess 
conc]n 7z def9$ "u section #c ( ! ,small
 ,bus9ess ,act 7#ae ,u4,s4,c4 #fcb774   
7d7 ,small bus9ess heal? acc\nt ,=      
purposes ( ?is section-- 7#a7 ,9 g5]al  
,! t]m small bus9ess heal? acc\nt means 
a tru/ creat$ or organiz$ 9 ! ,unit$    
,/ates z a small bus9ess heal? acc\nt   
exclusively = ! purpose ( pay+ !        
qualifi$ m$ical exp5ses ( ! acc\nt      
b5efici>y1 b only if ! writt5 gov]n+    
in/rum5t creat+ ! tru/ meets ! foll[+   
requirem5ts3  7,a7 ,except 9 ! case ( a 

rollov] contribution describ$ 9         
subsection 7f77#e7 or section           
#bbj7;f77#e71 no contribution w be      
accept$--  7i7 unless x is 9 ca%1 or    
7ii7 to ! ext5t su* contribution1 :5    
add$ to previ\s contributions to ! tru/ 
= ! cal5d> ye>1 exce$s ! sum (--  7,i7 !
 doll> am\nt 9 effect "u subsection     
7b77#b71 &  7,,ii7 ! doll> am\nt 9      
effect "u subsection 7b77#c74  7,b7 ,!  
tru/ee is a bank 7z def9$ 9 section     
#djh7n771 an insurance company 7z def9$ 
9 section #haf71 or ano!r p]son :o      
demon/rates to ! satisfaction ( !       
,secret>y t ! mann] 9 :i* su* p]son w   
adm9i/] ! tru/ w be consi/5t ) !        
requirem5ts ( ?is section4  7,c7 ,no "p 
( ! tru/ assets w be inve/$ 9 life      
insurance contracts4  7,d7 ,! assets ( !
 tru/ w n be comm+l$ ) o!r prop]ty      
except 9 a common tru/ fund or common   
inve/m5t fund4  7,e7 ,! int]e/ ( an     
individual 9 ! balance 9 _! acc\nt is   
non=feitable4  7#b7 ,qualifi$ m$ical    
exp5ses  7,a7 ,9 g5]al ,! t]m qualifi$  

m$ical exp5ses means1 ) respect to an   
acc\nt b5efici>y1 am\nts paid by su*    
b5efici>y =--  7i7 m$ical c>e 7z def9$ 9
 section #bac7;d77 = su* individual1 !  
sp\se ( su* individual1 & any dep5d5t 7z
 def9$ 9 section #aeb1 det]m9$ )\t reg>d
 to subsections 7b77#a71 7b77#b71 &     
7d77#a77;,b7 !re(7 ( su* individual1 b  
only to ! ext5t su* am\nts are n        
comp5sat$ = by insurance or o!rwise1 &  
7ii7 cov]age "u a heal? plan4  7,b7     
,prescrib$ drug ,! t]m qualifi$ m$ical  
exp5ses %all include an am\nt paid =    
m$ic9e or a drug only if su* m$ic9e or  
drug is a prescrib$ drug 7det]m9$ )\t   
reg>d to :e!r su* drug is available )\t 
a prescription7 or is insul94  7,c7     
,prohibition  7i7 ,9 g5]al ,! t]m       
qualifi$ m$ical exp5ses %all n include  
any am\nt paid =-- 7,i7 an abortion1    
7,,ii7 any heal? plan cov]age describ$ 9
 clause 7ii7 ( subp>agraph 7,a7 :i*     
includes cov]age = abortion1 or  7,,iii7
 any prescrib$ drug1 z describ$ 9       
subp>agraph 7,b71 = an abortion4  7ii7  

,exception ,?is subp>agraph %all n apply
 9 ! case (--  7,i7 a pregnancy :i* is !
 result ( an act ( rape or ince/1 or    
7,,ii7 a woman :o suff]s f a physical   
disord]1 physical injury1 or physical   
illness t w\ld1 z c]tifi$ by a          
physician1 place ! woman 9 dang] ( dea? 
unless an abortion is p]=m$1 includ+ a  
life-endang]+ physical condition caus$  
by or aris+ f ! pregnancy itself4  7#c7 
,acc\nt b5efici>y ,! t]m acc\nt         
b5efici>y means ! individual on ^:      
behalf ! small bus9ess heal? acc\nt 0   
e/abli%$4  7#d7 ,c]ta9 rules to apply   
,rules simil> to ! rules describ$ 9     
section #bbc7;d77#d7 %all apply =       
purposes ( ?is section4  7e7 ,tax       
treatm5t ( acc\nts ,rules simil> to !   
rules describ$ 9 section #bbc7;e7 %all  
apply = purposes ( ?is section4  7f7    
,tax treatm5ts ( di/ributions  7#a7     
,am\nts us$ = qualifi$ m$ical exp5ses   
,any am\nt paid or di/ribut$ out ( a    
small bus9ess heal? acc\nt :i* is us$   
exclusively to pay qualifi$ m$ical      

exp5ses ( any acc\nt b5efici>y %all n be
 includible 9 gross income4  7#b7       
,inclusion ( am\nts n us$ = qualifi$    
m$ical exp5ses ,any am\nt paid or       
di/ribut$ out ( a small bus9ess heal?   
acc\nt :i* is n us$ exclusively to pay !
 qualifi$ m$ical exp5ses ( ! acc\nt     
b5efici>y %all be includ$ 9 ! gross     
income ( su* b5efici>y4  7#c7 ,excess   
contributions return$ be=e due date (   
return  7,a7 ,9 g5]al ,if any excess    
contribution is contribut$ = a taxable  
ye> to any small bus9ess heal? acc\nt ( 
an individual1 p>agraph 7#b7 %all n     
apply to di/ributions f ! small bus9ess 
heal? acc\nts ( su* individual 7to !    
ext5t su* di/ributions d n exce$ !      
aggregate excess contributions to all   
su* acc\nts ( su* individual = su* ye>7 
if--  7i7 su* di/ribution is receiv$ by 
! individual on or be=e ! la/ day       
prescrib$ by law 7includ+ ext5sions (   
"t7 = fil+ su* individual's return = su*
 taxable ye>1 &  7ii7 su* di/ribution is
 accompani$ by ! am\nt ( net income     

attributable to su* excess contribution4
  ,any net income describ$ 9 clause 7ii7
 %all be includ$ 9 ! gross income ( !   
individual = ! taxable ye> 9 :i* x is   
receiv$4  7,b7 ,excess contribution ,=  
purposes ( subp>agraph 7,a71 ! t]m      
excess contribution means any           
contribution 7o!r ?an a rollov]         
contribution describ$ 9 p>agraph 7#e7 or
 section #bbj7;f77#e77 :i* is nei!r     
excludable f gross income "u section    
#ajf7;d7 nor d$uctible "u ?is section4  
7#d7 ,additional tax on di/ributions n  
us$ = qualifi$ m$ical exp5ses  7,a7 ,9  
g5]al ,! tax impos$ by ?is *apt] on !   
acc\nt b5efici>y = any taxable ye> 9 :i*
 !re is a paym5t or di/ribution f a     
small bus9ess heal? acc\nt ( su*        
b5efici>y :i* is includible 9 gross     
income "u p>agraph 7#b7 %all be increas$
 by #bj p]c5t ( ! am\nt :i* is s        
includible4  7,b7 ,exception =          
disability or dea? ,subp>agraph 7,a7    
%all n apply if ! paym5t or di/ribution 
is made aft] ! acc\nt b5efici>y becomes 

disabl$ )9 ! mean+ ( section #gb7m77#g7 
or dies4  7,c7 ,exceptions =            
di/ributions aft] m$ic>e eligibility    
,subp>agraph 7,a7 %all n apply to any   
paym5t or di/ribution aft] ! date on :i*
 ! acc\nt b5efici>y atta9s ! age        
specifi$ 9 section #ahaa ( ! ,social    
,security ,act4  7#e7 ,rollov]          
contribution  7,a7 ,9 g5]al ,an am\nt is
 describ$ 9 ?is p>agraph z a rollov]    
contribution if x meets ! requirem5ts ( 
subp>agraph 7,b74  7,b7 ,rollov]        
contribution rules  7i7 ,9 g5]al        
,p>agraph 7#b7 %all n apply to any am\nt
 paid or di/ribut$ f-- 7,i7 a heal?     
sav+s acc\nt 7z describ$ 9 section      
#bbc7;d77 to ! acc\nt b5efici>y to !    
ext5t ! am\nt receiv$ is paid into a    
small bus9ess heal? acc\nt1 or  7,,ii7 a
 small bus9ess heal? acc\nt to ! acc\nt 
b5efici>y to ! ext5t ! am\nt receiv$ is 
paid into a small bus9ess heal? acc\nt  
or a heal? sav+s acc\nt1  = ! b5efit (  
su* b5efici>y n lat] ?an ! sixtie? day  
aft] ! day on :i* ! b5efici>y receives !

 paym5t or di/ribution4  7ii7           
,limitation ,?is p>agraph %all n apply  
to any am\nt describ$ 9 subp>agraph 7,a7
 receiv$ by an individual f a heal?     
sav+s acc\nt or a small bus9ess heal?   
acc\nt if1 at any "t dur+ ! #a-ye> p]iod
 end+ on ! day ( su* receipt1 su*       
individual receiv$ any o!r am\nt        
describ$ 9 subp>agraph 7,a7 f a heal?   
sav+s acc\nt or a small bus9ess acc\nt  
:i* 0 n includible 9 ! individual's     
gross income because ( ! application (  
?is p>agraph4  7#f7 ,additional rules   
,rules simil> to ! rules describ$ 9     
p>agraphs 7#f7 ?r\gh 7#h7 ( section     
#bbc7;e7 %all apply = purposes ( ?is    
section4  7g7 ,co/-(-,liv+ adju/m5t     
7#a7 ,9 g5]al ,9 ! case ( any taxable   
ye> beg9n+ aft] #bjai1 ea* doll> am\nt 9
 subsection 7b77#b7 %all be increas$ by 
an am\nt equal to--  7,a7 su* doll>     
am\nt1 multipli$ by  7,b7 ! co/-(-liv+  
adju/m5t det]m9$ "u section #a7;f77#c7 =
 ! cal5d> ye> 9 :i* su* taxable ye>     
beg9s det]m9$ by sub/itut+ cal5d> ye>   

#bjah = cal5d> ye> #bjaf 9 subp>agraph  
7,a77ii7 !re(4  7#b7 ,r\nd+ ,if any     
increase "u p>agraph 7#a7 is n a        
multiple ( #ej1 su* increase %all be    
r\nd$ to ! ne>e/ multiple ( #ej4  7h7   
,reports  7#a7 ,9 g5]al ,! ,secret>y may
 require ! tru/ee ( a small bus9ess     
heal? acc\nt to make su* reports reg>d+ 
su* acc\nt to ! ,secret>y & to ! acc\nt 
b5efici>y ) respect to contributions1   
di/ributions1 ! return ( excess         
contributions1 & su* o!r matt]s z !     
,secret>y det]m9es appropriate4  7#b7   
,"t & mann] ,! reports requir$ by ?is   
subsection %all be fil$ at su* "t & 9   
su* mann] & furni%$ to su* individuals  
at su* "t & 9 su* mann] z may be requir$
 by ! ,secret>y4  4  7b7 ,con=m+        
am5dm5ts  7#a7 ,p>agraph 7#b7 ( section 
#bf7;b7 ( ! ,int]nal ,rev5ue ,code (    
#aihf is am5d$-- 7,a7 9 subp>agraph     
7,s71 by ins]t+ #bbd7;b77#h77;i77,,ii71 
aft] #bbc7;b77#h77;i77,,ii712 &  7,b7 by
 /rik+ subp>agraph 7,u7 & ins]t+ !      
foll[+3  7,u7 sections #bbc7;f77#d7 &   

#bbd7;f77#d7 7relat+ to additional tax  
on heal? sav+s acc\nt di/ributions &    
small bus9ess hea? acc\nt di/ributions n
 us$ = qualifi$ m$ical exp5ses71  4     
7#b7 ,p>agraph 7#c7 ( section #ce7;g7 ( 
su* ,code is am5d$ by /rik+ or f a heal?
 sav+s acc\nt 7z def9$ 9 section        
#bbc7;d77 & ins]t+ 1 a heal? sav+s      
acc\nt 7z def9$ 9 section #bbc7;d771 or 
a small bus9ess heal? acc\nt 7z def9$ 9 
section #bbd7;d774  7#c7 ,p>agraph 7#ai7
 ( section #fb7;a7 ( su* ,code is am5d$ 
to read z foll[s3  7#ai7 ,heal? sav+s   
acc\nts & small bus9ess heal? acc\nts ,!
 d$uctions all[$ by sections #bbc &     
#bbd4  4  7#d7 ,subsection 7d7 ( section
 #ajf ( su* ,code ( #aihf is am5d$--    
7,a7 9 ! head+1 by ins]t+ & small       
bus9ess heal? acc\nts2  7,b7 9 p>agraph 
7#a71 by /rik+ ,9 g5]al 9 ! head+ &     
ins]t+ ,heal? sav+s acc\nts2  7,c7 by   
r$esignat+ p>agraphs 7#b7 & 7#c7 z      
p>agraphs 7#c7 & 7#d71 respectively2 &  
7,d7 by ins]t+ aft] p>agraph 7#a7 !     
foll[+ new p>agraph3  7#b7 ,small       

bus9ess heal? acc\nts ,9 ! case ( an    
employee :o is an eligible individual 7z
 def9$ 9 section #bbd7;c77#b771 am\nts  
contribut$ by su* employee's employ] to 
any small bus9ess heal? acc\nt 7z def9$ 
9 section #bbd7;d77 ( su* employee %all 
be treat$ z employ]-provid$ cov]age =   
m$ical exp5ses "u an accid5t or heal?   
plan to ! ext5t su* am\nts d n exce$ !  
limitation "u section #bbd7;b7 7det]m9$ 
)\t reg>d to ?is subsection7 :i* is     
applicable to su* employee = su* taxable
 ye>4  4  7#e7 ,subp>agraph 7,a7 (      
section #bbj7;f77#e7 ( su* ,code is     
am5d$ by /rik+ or a heal? sav+s acc\nt  
7z def9$ 9 section #bbc7;d77 & ins]t+ 1 
a heal? sav+s acc\nt 7z def9$ 9 section 
#bbc7;d771 or a small bus9ess heal?     
acc\nt 7z def9$ 9 section #bbd7;d774    
7#f7 ,subsection 7d7 ( section #djh (   
su* ,code is am5d$ by add+ at ! end !   
foll[+ new p>agraph3  7#aj7 ,di/ribution
 = small bus9ess heal? acc\nt fund+     
7,a7 ,9 g5]al ,9 ! case ( an individual 
:o is an eligible individual 7z def9$ 9 

section #bbd7;c77#b77 & :o elects !     
application ( ?is p>agraph = a taxable  
ye>1 gross income ( ! individual = !    
taxable ye> does n include a qualifi$   
,,sbha fund+ di/ribution to ! ext5t su* 
di/ribution is o!rwise includible 9     
gross income4  7,b7 ,qualifi$ ,,sbha    
fund+ di/ribution ,= purposes ( ?is     
p>agraph1 ! t]m qualifi$ ,,sbha fund+   
di/ribution means a di/ribution f an    
individual retirem5t plan 7o!r ?an a    
plan describ$ 9 subsection 7k7 or 7p77 (
 ! employee to ! ext5t t su* di/ribution
 is contribut$ to ! small bus9ess heal? 
acc\nt ( ! individual 9 a direct        
tru/ee-to-tru/ee transf]4  7,c7         
,limitations  7i7 ,maximum doll>        
limitation ,! am\nt exclud$ f gross     
income by subp>agraph 7,a7 %all n exce$ 
! applicable annual limitation "u       
section #bbd7;b7 at ! "t ( ! qualifi$   
,,sbha fund+ di/ribution4  7ii7 ,"o-"t  
transf]  ,an individual may make an     
election "u subp>agraph 7,a7 only = "o  
qualifi$ ,,sbha fund+ di/ribution dur+ !

 lifetime ( ! individual4 ,su* an       
election1 once made1 %all be            
irrevocable4  7,d7 ,failure to ma9ta9   
eligibility  7i7 ,9 g5]al ,if1 at any "t
 dur+ ! te/+ p]iod1 ! individual is n an
 eligible individual1 !n ! aggregate    
am\nt ( all contributions to ! small    
bus9ess heal? acc\nt ( ! individual made
 "u subp>agraph 7,a7--  7,i7 %all be    
includible 9 ! gross income ( !         
individual = ! taxable ye> 9 :i* occurs 
! fir/ mon? 9 ! te/+ p]iod = :i* su*    
individual is n an eligible individual1 
&  7,,ii7 ! tax impos$ by ?is *apt] =   
any taxable ye> on ! individual %all be 
increas$ by #aj p]c5t ( ! am\nt :i* is s
 includible4  7ii7 ,exception =         
disability or dea? ,subclauses 7,i7 &   
7,,ii7 ( clause 7i7 %all n apply if !   
individual ceas$ to be an eligible      
individual by reason ( ! dea? ( !       
individual or ! individual becom+       
disabl$ 7)9 ! mean+ ( section           
#gb7m77#g774  7iii7 ,te/+ p]iod ,! t]m  
te/+ p]iod means ! p]iod beg9n+ ) ! mon?

 9 :i* ! qualifi$ ,,sbha fund+          
di/ribution is contribut$ to a small    
bus9ess heal? acc\nt & end+ on ! la/ day
 ( ! twelf? mon? foll[+ su* mon?4  7,e7 
,application ( section #gb ,not)/&+     
section #gb1 9 det]m9+ ! ext5t to :i* an
 am\nt is treat$ z o!rwise includible 9 
gross income = purposes ( subp>agraph   
7,a71 ! aggregate am\nt di/ribut$ f an  
individual retirem5t plan %all be treat$
 z includible 9 gross income to ! ext5t 
t su* am\nt does n exce$ ! aggregate    
am\nt :i* w\ld h be5 s includible if all
 am\nts f all individual retirem5t plans
 7 di/ribut$4 ,prop] adju/m5ts %all be  
made 9 apply+ section #gb to o!r        
di/ributions 9 su* taxable ye> &        
subsequ5t taxable ye>s4  4  7#g7        
,subp>agraph 7,b7 ( section #hdh7;e77#a7
 ( su* ,code is am5d$-- 7,a7 9 clause   
7iv71 by /rik+ & at ! end2  7,b7 9      
clause 7v71 by /rik+ ! p]iod at ! end & 
ins]t+ 1 &2 &  7,c7 by add+ at ! end !  
foll[+ new clause3  7vi7 any contract   
:i* is a small bus9ess heal? acc\nt 7z  

def9$ 9 section #bbd7;d774  4  7#h7     
,p>agraph 7#b7 ( section #hgg;,a7e7 (   
su* ,code is am5d$ by ins]t+ a small    
bus9ess heal? acc\nt 7z def9$ 9 section 
#bbd71 aft] a heal? sav+s acc\nt 7z     
def9$ 9 section #bbc74  7#i7 ,subsection
 7a7 ( section #digc ( su* ,code is     
am5d$-- 7,a7 9 p>agraph 7#e71 by /rik+  
or at ! end2  7,b7 by r$esignat+        
p>agraph 7#f7 z p>agraph 7#g72 &  7,c7  
by ins]t+ aft] p>agraph 7#e7 ! foll[+   
new p>agraph3  7#f7 a small bus9ess     
heal? acc\nt 7)9 ! mean+ ( section      
#bbd7;d771 or  4  7#aj7 ,section #dige (
 su* ,code is am5d$--  7,a7 9 subsection
 7c71 by add+ at ! end ! foll[+ new     
p>agraph3  7#g7 ,special rule = small   
bus9ess heal? acc\nts ,an individual =  
^: b5efit a small bus9ess heal? acc\nt  
7)9 ! mean+ ( section #bbd7;d77 is      
e/abli%$ %all be exempt f ! tax impos$  
by ?is section ) respect to any         
transaction conc]n+ su* acc\nt 7:i* w\ld
 o!rwise be taxable "u ?is section7 if1 
) respect to su* transaction1 ! acc\nt  

ceases to be a small bus9ess heal?      
acc\nt by reason ( ! application (      
section #bbd7;e7 to su* acc\nt4  2 &    
7,b7 9 p>agraph 7#a7 ( subsection 7e7-- 
7i7 by r$esignat+ subp>agraphs 7,f7 &   
7,g7 z subp>agraphs 7,g7 & 7,h71        
respectively2 &  7ii7 by ins]t+ aft]    
subp>agraph 7,e7 ! foll[+ new           
subp>agraph3  7,f7 a small bus9ess heal?
 acc\nt describ$ 9 section #bbd7;d71  4 
7#aa7 ,subsection 7a7 ( section #fjea ( 
su* ,code is am5d$-- 7,a7 by r$esignat+ 
p>agraphs 7#ac7 ?r\gh 7#ag7 z p>agraphs 
7#ad7 ?r\gh 7#ah71 respectively2 &  7,b7
 by ins]t+ aft] p>agraph 7#ab7 ! foll[+ 
new p>agraph3  7#ac7 ! am\nt contribut$ 
to any small bus9ess heal? acc\nt 7z    
def9$ 9 section #bbd7;d77 ( su* employee
 or su* employee's sp\se1  4  7#ab7     
,p>agraph 7#b7 ( section #ffic7;a7 ( su*
 ,code is am5d$-- 7,a7 by r$esignat+    
subp>agraphs 7,d7 ?r\gh 7,f7 z          
subp>agraphs 7,e7 ?r\gh 7,g71           
respectively2 &  7,b7 by ins]t+ aft]    
subp>agraph 7,c7 ! foll[+ new           

subp>agraph3  7,d7 section #bbd7;h7     
7relative to small bus9ess heal?        
acc\nts71  4  7#ac7 ,! table ( sections 
= "p ,,vii ( sub*apt] ,b ( *apt] #a (   
su* ,code is am5d$ by r$esignat+ ! item 
relat+ to section #bbd z relat+ to      
section #bbe & by ins]t+ aft] ! item    
relat+ to section #bbc ! foll[+ new     
item3  ,sec4 #bbd4 ,small ,bus9ess      
,heal? ,acc\nts4  4  7c7 ,effective date
 ,! am5dm5ts made by ?is section %all   
apply to taxable ye>s beg9n+ aft]       
,decemb] #ca1 #bjah4