440                             LAWS OF MARYLAND                      [CH. 180

ployers' liability acts, tort actions, pensions annuities, accident
or health insurance, etc. — Except in the case of amounts attributable
to (and not in excess of) deductions allowed under Section 281 (q)
for any prior taxable year, amounts received under workmen's com-
pensation or employers' liability acts, or by way of damages for per-
sonal injuries or property damage, whether by suit or agreement,
and any amount received as a pension, annuity, or similar allowance
for personal injuries or sickness resulting from active service in the
armed forces of the United States, or amounts received through acci-
dent or health, insurance for personal injuries or sickness (other than
amounts received by an employee, to the extent such amounts are
attributable to contributions by the employer which were not in-
cludible in the gross income of the employee, or are paid by the
employer). Notwithstanding the provisions of the foregoing sen-
tence, amounts received by an employee through accident or health
insurance for personal injuries or sickness, even though attributable
to contributions by the employer which were not includible in the
gross income of the employee or which are paid by the employer,
shall be excluded from gross income to the extent such amounts
constitute (1) reimbursement of expenses for medical care of the
taxpayer, his spouse, and his dependents provided however, that
this clause shall not apply to amounts attributable to and not in
excess of deductions allowed under Section 281 (q) for any prior
taxable year, or (2) payment for the permanent loss or loss of use
of a member or function of the body, or the permanent disfigure-
ment of the taxpayer, his spouse or a dependent, and are computed
with reference to the nature of the injury without regard to the
period the employee is absent from work, or (3) wages or payments
in lieu of wages for a period during which the employee is absent
from work on account of personal injuries or sickness, provided,
however, that this clause shall not apply to the extent such amounts
exceed a weekly rate of one hundred dollars or are attributable to
the first seven calendar days of the employee's absence from work
on account of sickness unless the employee is hospitalized on account
of such sickness for at least one day during such period. If the
amounts described in clause three are not paid on the basis of a
weekly pay period, the weekly rate shall be determined in a manner
to be prescribed by regulations of the Comptroller. For purposes
of this subsection, amounts received under an accident or health
plan for employees under a wage continuation plan, or from an
accident and health welfare fund or plan as defined in this subtitle,
shall be treated as amounts received through accident or health in-
surance. (4) For all calendar years beginning after December 31,
1963, and in lieu of paragraph (3) hereof, payments under a wage
continuation plan shall be excluded to the extent provided under
Section 105 (d) of the Federal Revenue Code and amended by Sec-
tion 205 of the Federal Revenue Act of 1964.

Sec. 2. And be it further enacted, That this Act shall take effect
June 1st, 1964.

Approved April 7, 1964.