Sec. 3. 36 MRSA §5122, sub-§1, ¶Q is enacted to read:

Q.__Amounts withdrawn pursuant to section 6601, subsection 4 by the taxpayer during the taxable year from an individual medical savings account established in the taxpayer's name.

Sec. 4. 36 MRSA §5122, sub-§2, ¶¶R and S, as enacted by PL 2001, c. 714, Pt. AA, §4, are amended to read:

R. For tax years beginning in 2005, 2006 or 2007, an amount equal to 1/3 of any amount added back to federal adjusted gross income by the taxpayer for the 2003 tax year pursuant to subsection 1, paragraph N, except with respect to 3-year property, in which case this paragraph does not apply to 2006 or 2007 tax years and the amount to be subtracted pursuant to this paragraph in the 2005 tax year is an amount equal to the amount added back pursuant to subsection 1, paragraph N for tax years beginning in 2003; and

S. For tax years beginning in 2006, 2007 or 2008, an amount equal to 1/3 of any amount added back to federal adjusted gross income by the taxpayer for the 2004 tax year pursuant to subsection 1, paragraph N, except with respect to 3-year property, in which case this paragraph does not apply to 2007 or 2008 tax years and the amount to be subtracted pursuant to this paragraph in the 2006 tax year is in an amount equal to the amount added back pursuant to subsection 1, paragraph N for tax years beginning in 2004.; and

Sec. 5. 36 MRSA §5122, sub-§2, ¶T is enacted to read:

T.__Contributions or deposits to an individual medical savings account established under chapter 914 subject to the following limitations.

(1)__The taxpayer may subtract:

(a)__The amount of contributions made by the taxpayer's employer during the taxable year to the taxpayer's individual medical savings account to the extent that the employer contributions are included in the taxpayer's federal adjusted gross income; and

(b)__The amount deposited by the taxpayer in the account during the taxable year.