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TITLE 26-INTERNAL REVENUE CODE shall be governed solely by section 162 (relating to trade or business expenses). For purposes of this chapter and subtitle B, in the case of any individual who before July 1, 1974, was a par- ticipant in a plan described in the preceding sentence- (A) such individual, if he is or was an em- ployee within the meaning of section 401(c)(1), shall be treated (with respect to ser- vice covered by the plan) as being an employ- ee other than an employee within the mean- ing of section 401(c)(1) and as being an em- ployee of a participating employer under the plan, (B) earnings derived from service covered by the plan shall be treated as not being earned income within the meaning of section 401(c)(2), and (C) such individual shall be treated as an employee of a participating employer under the plan with respect to service before July 1, 1975, covered by the plan. Section 277 (relating to deductions incurred by certain membership organizations in transac- tions with members) does not apply to any trust described in this subsection. The first and third sentences of this subsection shall have no application with respect to amounts contribut- ed to a trust on or after any date on which such trust is qualified for exemption from tax under section 501(a). [(d) Repealed. Pub. L. 94-455, title XIX, § 1901(a)(59), Oct. 4, 1976, 90 Stat. 1774] (e) Special limitations for self-employed individuals (1) In general In the case of a plan included in subsection (a)(1), (2), or (3), which provides contribu- tions or benefits for employees some or all of whom are employees within the meaning of section 401(c)(1), the amounts deductible under subsection (a) in any taxable year with respect to contributions on behalf of any em- ployee within the meaning of section 401(c)(1) shall, subject to paragraphs (2) and (4), not exceed $7,500, or 15 percent of the earned income derived by such employee from the trade or business with respect to which the plan is established, whichever is the lesser. (2) Contributions made under more than one plan (A) Overall limitation In any taxable year in which amounts are deductible with respect to contributions under two or more plans on behalf of an in- dividual who is an employee within the meaning of section 401(c)(1) with respect to such plans, the aggregate amount deduct- ible for such taxable year under all such plans with respect to contributions on behalf of such employee shall (subject to paragraph (4)) not exceed $7,500, or 15 per- cent of the earned income derived by such employee from the trades or businesses with respect to which the plans are estab- lished, whichever is the lesser. (B) Allocation of amounts deductible In any case in which the amounts deduct- ible under subsection (a) (with the applica- tion of the limitations of this subsection) with respect to contributions made on behalf of an employee within the meaning of section 401(c)(1) under two or more plans are, by reason of subparagraph (A), less than the amounts deductible under such subsection determined without regard to such subparagraph, the amount deductible under subsection (a) with respect to such contributions under each such plan shall be determined in accordance with regulations prescribed by the Secretary. (3) Contributions allocable to insurance protection For purposes of this subsection, contribu- tions which are allocable (determined under regulations prescribed by the Secretary) to the purchase of life, accident, health, or other insurance shall not be taken into ac- count. (4) Limitations cannot be lower than $750 or 100 percent of earned income The limitations under paragraphs (1) and (2)(A) for any employee shall not be less than the lesser of- (A) $750, or (B) 100 percent of the earned income de- rived by such employee from the trades or businesses taken into account for purposes of paragraph (1) or (2)(A) as the case may be. This paragraph does not apply for any tax- able year to any employee whose adjusted gross income for such taxable year (deter- mined separately for each individual, without regard to any community property laws, and without regard to the deduction allowable under subsection (a) exceeds $15,000. (f) Certain loan repayments considered as contribu- tions For purposes of this section, any amount paid, directly or indirectly, by an owner-em- ployee (within the meaning of section 401(c)(3)) in repayment of any loan which under section 72(m)(4)(B) was treated as an amount received under a contract purchased by a trust described in section 401(a) which is exempt from tax under section 501(a) or purchased as a part of a plan described in section 403(a) shall be treated as a contribution to which this section applies on behalf of such owner-employee to such trust or to or under such plan. (g) Certain employer liability payments considered as contributions For purposes of this section any amount paid by an employer under section 4062, 4063, or 4064 of the Employee Retirement Income Secu- rity Act of 1974 shall be treated as a contribu- tion to which this section applies by such em- ployer to or under a stock bonus, pension, profit-sharing, or annuity plan. (Aug. 16, 1954, ch. 736, 68A Stat. 138; Sept. 2, 1958, Pub. L. 85-866, title I, § 24, 72 Stat. 1623; Oct. 10, 1962, Pub. L. 87-792. § 3, 76 Stat. 819; Oct. 23, 1962, Pub. L. 87-863, § 2(b), 76 Stat. 1141; Nov. 13, 1966, Pub. L. 89-809, title II, §204(a), (b)(2), (3), 80 Stat. 1577; Dec. 30, 1969, Pub. L. 91-172, title III, § 321(b)(3), 83 Stat. 591; Sept. 2, 1974, Pub. L. 93-406, title II, §§ 1013(c), 1016(a)(3), 2001(a), (g)(2)(E), F), 2004(b), (c)(1), 2007(a), (b), title IV, § 4081(a), 88 Stat. Page 310 9 404