‘‘(ii) the amount which is so includ-
ible, or 
‘‘(B) the contribution credit recapture 
amount for such taxable year. 
‘‘(2) 
CONTRIBUTION
CREDIT
RECAPTURE 
AMOUNT.—For purposes of this subsection, the term 
‘contribution credit recapture amount’ means, with 
respect to any taxpayer for any taxable year, the ex-
cess (if any) of— 
‘‘(A) the aggregate HSA contribution cred-
its allowed to the taxpayer for such taxable year 
and the three preceding taxable years, over 
‘‘(B) the aggregate tax imposed under this 
subsection with respect to such taxpayer for 
such three preceding taxable years. 
‘‘(3) HSA CONTRIBUTION CREDIT.—For pur-
poses of this subsection, the term ‘HSA contribution 
credit’ means, with respect to any taxable year, the 
credit which would have been allowed under this sec-
tion for such taxable year if the amount described 
in subsection (a)(2)(A) for such taxable year were 
zero.’’. 
(b) CONFORMING AMENDMENTS.— 
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(1) Subsection (f) of section 223 of the Internal 
Revenue Code of 1986 is amended by adding at the 
end the following new paragraph: 
‘‘(9) CROSS REFERENCE.—For rules providing 
for the recapture of the HSA contribution credit in 
the case of certain nonqualified distributions from 
health savings accounts, see section 36(d).’’. 
(2) Paragraph (2) of section 1324(b) of title 
31, United States Code, is amended by inserting ‘‘or 
section 36’’ after ‘‘section 35’’. 
(3) The table of sections for subpart C of part 
IV of subchapter A of chapter 1 of the Internal Rev-
enue Code of 1986 is amended by striking the item 
relating to section 36 and by inserting after the item 
relating to section 35 the following new items: 
‘‘Sec. 36. Employment taxes paid with respect to premiums for high deductible 
health plans and contributions to health savings accounts. 
‘‘Sec. 37. Overpayments of tax.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2006. 
SEC. 4. REFUNDABLE CREDIT FOR HEALTH INSURANCE 
COVERAGE 
UNDER 
HIGH 
DEDUCTIBLE 
HEALTH PLAN. 
(a) ALLOWANCE OF CREDIT.—Subpart C of part IV 
of subchapter A of chapter 1 of the Internal Revenue Code 
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of 1986 (as amended by this Act) is amended by inserting 
after section 36 the following new section: 
‘‘SEC. 36A. HEALTH INSURANCE COVERAGE UNDER HIGH 
DEDUCTIBLE HEALTH PLAN. 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in-
dividual, there shall be allowed as a credit against the tax 
imposed by this subtitle for the taxable year the aggregate 
amount paid in cash by the taxpayer for qualified coverage 
under a high deductible health plan for the taxpayer and 
the taxpayer’s spouse and dependents. 
‘‘(b) LIMITATIONS.— 
‘‘(1) IN GENERAL.—The amount allowable as a 
credit under subsection (a) for the taxable year shall 
not exceed the sum of the monthly limitations for 
months during such taxable year that the taxpayer 
or the taxpayer’s spouse or dependents is an eligible 
individual. 
‘‘(2) MONTHLY LIMITATION.— 
‘‘(A) IN GENERAL.—The monthly limita-
tion for any month is the credit percentage of 
1⁄12 of— 
‘‘(i) $1,111 in the case of qualified 
health insurance covering only 1 adult or 1 
or more children, 
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