RESTORATION OF IRA DEDUCTION FOR CERTAIN TAXPAYERS.

SEC. 301. RESTORATION OF IRA DEDUCTION FOR CERTAIN TAXPAYERS. (a) Increase in Income Limits Applicable to Active Participants.— (1) In general.—Subparagraph (B) of section 219(g)(3) (relating to applicable dollar amount) is amended to read as follows: “(B) Applicable dollar amount.—The term ‘applicable dollar amount’ means the following: “(i) In the case of a taxpayer filing a joint return: “For taxable years beginning in: The applicable dollar amount is: 1998 $50,000 1999 $51,000 2000 $52,000 2001 $53,000 2002 $54,000 2003 $60,000 2004 $65,000 2005 $70,000 2006 $75,000 2007 and thereafter $80,000.00 111 STAT. 825 “(ii) In the case of any other taxpayer (other than a married individual filing a separate return): “For taxable years beginning in: The applicable dollar amount is: 1998 $30,000 1999 $31,000 2000 $32,000 2001 $33,000 2002 $34,000 2003 $40,000 2004 $45,000 2005 and thereafter $50,000 “(iii) In the case of a married individual filing a separate return, zero”. (2) Increase in phase-out range for joint returns.—Clause (ii) of section 219(g)(2)(A) is amended by inserting “($20,000 in the case of a joint return for a taxable year beginning after December 31, 2006)”. (b) Limitations for Active Participation Not Based on Spouse’s Participation.—Section 219(g) (relating to limitation on deduction for active participants in certain pension plans) is amended— (1) by striking “or the individual’s spouse” in paragraph (1), and (2) by adding at the end the following new paragraph: “(7) Special rule for certain spouses.—In the case of an individual who is an active participant at no time during any plan year ending with or within the taxable year but whose spouse is an active participant for any part of any such plan year— “(A) the applicable dollar amount under paragraph (3)(B)(i) with respect to the taxpayer shall be $150,000, and “(B) the amount applicable under paragraph (2)(A)(ii) shall be $10,000.”. (c) Effective Date.—The amendments made by this section shall apply to taxable years beginning after December 31, 1997.