Open the Door to a New Opportunity A special savings account that can help you double your money. AN IDA CAN HELP YOU SAVE $$$ FOR YOUR FIRST HOME COLLEGE FEES SMALL BUSINESS YOU WANT TO START YOU MUST MEET ONE OF THE FOLLOWING: TANF/K-TAP Recipient Household Assets under $10,000 Eligible for the Earned Income Tax Credit Total Household Income less than 2x Federal Poverty Level Persons in family Poverty guideline 1 $21,660 2 29,140 3 36,620 4 44,100 5 51,580 6 59,060 7 66,540 8 74,020 For families with more than 8 persons, add $7,480 for each additional person. SOURCE: Federal Register, Vol. 74, No. 14, January 23, 2009, pp. 4199–4201 Develop Financial Plan Complete a Financial Education Program Complete an IDA Application Open an IDA at a Local Bank or Credit Union Save at least $500 in an IDA over 2 to 3 years Receive a Dollar Match You save $500 Match you receive will be $1,000 Dollar matches vary by agency An IDA doubles your money by providing you with a dollar-fordollar match. For example, if you save $500 in an IDA, your sponsoring agency will match your initial $500 and you will have a total of $1000 in your account. Most sponsoring agencies in Kentucky require you to have a household income of less than twice the federal poverty level. You must complete a financial education program and a financial plan for achieving your goal. You can withdraw from the program at any time and you will receive only the money that you deposited into the IDA. Upon completing the program, you are able to use funds based on the financial goal you selected. However, your sponsoring agency must approve the withdrawal of any matched funds. I can use money from an IDA to meet any financial goal. False: Money from an IDA must be used for one of three goals: Paying for educational expenses Purchasing a home Starting a small business A sponsoring agency will match as much money as I can manage to save in an IDA. False: Your sponsoring agency will usually match up to $500. However, some agencies allow you to participate twice in an IDA program. To open an IDA, I must make at least $50,000 per year if I have four people living in my household. False: A family of four must make $44,100 or less per year to participate in an IDA program. The money I put into my IDA is nonrefundable if I decide to quit the program. False: The money you deposit into an IDA is yours and will be refunded if you quit the program. However, any matched funds will be returned to the sponsoring agency. Opening an IDA is the best way for me to learn about money management. False: Although opening an IDA is a great way to double your money, it is not a way to learn about money management. Money management skills are taught in financial education programs such as Money Smart. Kentucky Domestic Violence Association, Inc. P.O Box 356 Frankfort, KY 40502 Phone: (502) 209-5382 Web site: www.kdva.org Program participants must be survivors who have been affected by domestic violence in any way (parent or child). Participants must have household assets under $10,000, be eligible for the Earned Income Tax Credit, and have a total household income less than 2x the federal poverty level. IDAs include a 2-to-1 match. Participants save a maximum amount of $2000 and are eligible to spend $6,000 on their asset. In addition, KDVA has a separate emergency IDA fund to assist program participants with unforeseen expenses such as car repairs and rent. Emergency assistance is limited to $300 per participant. Community Action Council 710 High Street Lexington, KY 40508 Phone: (859) 233-4600 Web site: www.commaction.org Please contact Community Action Council for specific program requirements. The Race For Education, Inc. 1818 Versailles Road Lexington, KY 40504 Phone: (859) 252-8648 Fax: (859) 252-8030 Web site: www.racingscholarships.com Provides scholarships to students pursuing a career in the equine (horse) or agriculture industries as well as students from equine industry families. A student must be a scholarship recipient to open an IDA. The Center for Women and Families 927 South Second Street P.O. Box 2048 Louisville, KY 40201-2048 Phone: (502) 581-7200 Web site: www.thecenteronline.org Program participants can be survivors of domestic violence; the general public is welcome also. Participants must have low-to-moderate income and are required to complete three (3) money management workshops before opening an IDA. Money management classes cover topics such as check advance loans, insurance, and making a family budget. A total of six (6) workshops must be completed. Assistance with K-TAP K-TAP Information (502) 564-7050 Corporation for Enterprise Development (CFED)’s Individual development accounts: Respondent List. (2007). http://www.cfed.org/focus.m?parentid=31&siteid=374&id=374 IDA.com’s IDA facts. http://idaaccount.com U.S. Department of Health and Human Services. Assets for Independence, Office of Community Service. (2007). http://www.acf.hhs.gov/programs/ocs/afi/fact_sheet.html Corporation for Enterprise Development (CFED)’s Fact Sheet: Individual development accounts. http://www.cfed.org/imageManager/IDAnetwork/IDA_Fact_Sheet_2008_09_18.pdf Federal Deposit Insurance Corporation (FDIC). Money Smart Program. (2009). http://www.fdic.gov/consumers/consumer/moneysmart U.S. Department of Health and Human Services. The 2009 HHS Poverty Guidelines. (2009). http://aspe.hhs.gov/poverty/09poverty.shtml Questions Photographs: Microsoft Office Robert H. Flashman, Ph.D. State Extension Specialist in Family Resource Management Katrina Akande, M.A. Doctoral Candidate in Family Studies November 2010 Copyright © 2010 for materials developed by University of Kentucky Cooperative Extension. This publication may be reproduced in portions or its entirety for educational or nonprofit purposes only. Permitted users shall give credit to the author(s) and include this copyright notice. Educational programs of Kentucky Cooperative Extension serve all people regardless of race, color, age, sex, religion, disability, or national origin.