Section 2 of chapter 62 of the General Laws, as appearing in the 2010 Official Edition, is hereby amended by striking out subparagraph (D) of paragraph (1) of subsection (d) and inserting in place thereof the following:-

(D)  In the case of an individual who is an employee within the meaning of section 401(c)(1) of the Code, the deductions allowed by section 404 of the Code to the extent attributable to contributions made on behalf of such individual, except that deductions attributable to elective contributions made by such individual shall be allowed to the extent they do not exceed the limitation amounts in section 402(g)(1) of the Code.  No contribution on behalf of such individual shall be treated as an excess contribution under this chapter unless treated as an excess contribution for federal tax purposes in the year made.         

Eligible tax payers may be entitled to the deduction as follows:

(i)25 per cent of the federally allowed deduction for tax years 2008, 2009, and 2010;

(ii)50 per cent of the federally allowed deduction for tax year 2011;

(iii)75 per cent of the federally allowed deduction for tax year 2012; and

(iv)100 per cent of the federally allowed deduction for tax year 2013 and thereafter.