section) shall be reduced by the portion of the standard deduction for health insurance (as defined in section 224) allocable to the period: (1) The amount of wages determined under section 3121(a). (2) The amount of compensation determined under section 3231(e). (3) The amount of wages determined under section 3306(b). (b) Determination of standard deduction allocable to a period For purposes of subsection (a)— (1) In general The determination of the portion of the standard deduction for health insurance allocable to a period shall be made on the basis of a qualified certificate of eligible coverage furnished by the employee to the employer. (2) Qualified certificate of eligible coverage The term qualified certificate of eligible coverage means a statement of eligibility for the deduction allowable under section 224 which contains such information, is in such form, and is provided at such times, as the Secretary may prescribe. (3) Only 1 certificate in effect at a time Except as provided by the Secretary, an employee may have only 1 qualified certificate of eligible coverage in effect for any period. (4) Election An employee may elect not to have this section apply for any period for purposes of chapter 21 or 22. (c) Reconciliation of erroneous payments To be made at employee level (1) In general If the application of this subsection results in an incorrect amount being treated as wages or compensation for purposes of chapter 21, 22, or 23, whichever is applicable, with respect to any employee for one or more periods ending within a taxable year of the employee— (A) in the case of an aggregate overpayment of the taxes imposed by any such chapter for all such periods, there shall be allowed as a credit against the tax imposed by chapter 1 for such taxable year on such employee an amount equal to the amount of such overpayment, and (B) in the case of an aggregate underpayment of the taxes imposed by any such chapter for all such periods, the employee shall be liable for payment of the entire amount of such