Except in the case of amounts attributable to (and not in excess of) deductions allowed under section
213 (relating to medical, etc., expenses) for any prior taxable year, gross income does not include—
For purposes of paragraph (3), in the case of an individual who is, or has been, an employee within the meaning of section
401
(c)(1) (relating to self-employed individuals), contributions made on behalf of such individual while he was such an employee to a trust described in section
401
(a) which is exempt from tax under section
501
(a), or under a plan described in section
403
(a), shall, to the extent allowed as deductions under section
404, be treated as contributions by the employer which were not includible in the gross income of the employee. For purposes of paragraph (2), emotional distress shall not be treated as a physical injury or physical sickness. The preceding sentence shall not apply to an amount of damages not in excess of the amount paid for medical care (described in subparagraph (A) or (B) of section
213
(d)(1)) attributable to emotional distress.