Individual Development Accounts Frequently Asked Questions
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Individual Development Accounts An Introduction to IDA’s Frequently Asked Questions
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Individual Development Accounts are available to individuals in Baker, Union and Wallowa Counties in NE Oregon who want to make an investment in their existing or start-up business. This slide show answers some of the frequently asked questions about the program.
Transcript of Individual Development Accounts Frequently Asked Questions
Individual Development Accounts
An Introduction to IDA’sFrequently Asked Questions
By now you should know how to…
• Define a business IDA and what it is used for.
• Determine if you are eligible for an IDA.• Explain amount of time you have to save.• Explain what your IDA funds can and
cannot be used for. • Explain all of the requirements for
graduating from the microenterprise IDA program.
Let’s look at some Frequently Asked Questions…
• Is this a scam?• How many IDA’s am I allowed to
receive?• How many deposits can be missed
before I am terminated from the program?
• What if my situation changes while I am in the program?
• Is an IDA attachable in a legal judgment?
Frequently asked questions…• What if I have an existing business, or am a
partner in a business?
• If I have an emergency, can I make a withdrawal?
• How much money can I put in my savings account?
• Do I have to deposit the same amount each month?
• Do I have to pay taxes on my savings account?
• If I haven’t used my match money by the end of the term, do I still get the money?
Frequently asked questions…• Is this a scam?
– No. This program is funded through individuals, state tax credits, corporations and federal funds that are made available to people who want to by an asset. It will not cost you anymore money than you are willing to save.
• How many IDA’s am I allowed to receive? – There is a limit of 2 IDA’s per household– A participant is allowed to return for a second
time and save for a different type of asset, but other eligibility criteria will apply.
Frequently asked questions…• How many deposits can be missed before I am terminated
from the program?
– You are only allowed 2 missed deposits in a six month window. If you missed a deposit in April and May, you cannot miss another deposit before October, or you will be terminated.
• What if my situation changes while I am in the program?
– Even if your income increases, you will not be disqualified from the program once you have been accepted. The goal of this program is for you to improve financially – if your income goes up we feel successful and we hope you do to!
– If you move away, your continued participation will depend whether you are able to regularly interact with your original Program Member or transfer to another IDA program in your new area. If you move out of the program service area, you will not be able to continue in the program.
Frequently asked questions…
• Is an IDA attachable in a legal judgment? – Generally, accounts at financial institutions may
be attached by judgment creditors. IDA’s are subject to the applicable State law, and can be attached by a judgment creditor.
• What if I have an existing business, or am a partner in a business?
– Qualified expenses such as capitalization costs are allowable even for existing businesses or for a part-owner or partner business. If you and your partner both qualify to save in an IDA, you can “share” the maximum value of one IDA. If your partner doesn’t qualify, the partner will need to make a proportionate investment in the business when you invest your IDA.
Frequently asked questions…• If I have an emergency, can I make a withdrawal?
– Emergency withdrawals are not allowed for the first six months. You are allowed one emergency withdrawal after the first six month period.
– The emergency withdrawal must be approved by CASA in order for your account not to be terminated.
– If the withdrawal is not approved, your account will be closed and your participation will be terminated.
– Emergency withdrawals are to be paid back into the account within 12 months.
– An eligible emergency withdrawal:• Account must be more than 6 months old, and in good
standing.
• Withdrawal must be a true emergency such as eviction from home, paying for critical health care, or critical living expenses.
Things to remember…
• If you anticipate that you will miss two or more deposits in a row, consider requesting a Leave of Absence. – It is designed to give participants the opportunity
to weather short-term financial crises, regain ability to save and retain participation.
– Can be for one calendar month or up to six calendar months.
– Only one leave of absence is allowed per participant.
– Participant must agree to remain in contact with and participate in activities at NEOEDD
– Any deposits made during a leave of absence period, will reinstate the account and end the leave of absence.
Frequently asked questions…
• How much money can I put in my savings account?
– You can put as much money into the account as you would like, but only $2,500 will be matched, for a total of $10,000 of matched funds.
• Do I have to deposit the same amount each month?
– No, you can deposit whatever amount you want to, as long as you deposit a minimum of $25.
Frequently asked questions…
• Do I have to pay taxes on my savings account?
– You may need to report interest you earn from your savings. Keep in mind that the financial institution will report the interest you earn.
• If I haven’t used my match money by the end of the term, do I still get the money?
– No, if you do not use the CASA funds before your term ends, you will lose the match money and your savings will be returned to you. You have up to three years to complete the requirements and an additional six months to spend the funds.
The End…
If you have any further questions, contact me and I will answer as quickly as possible.
541-426-3598
Good Luck and Happy Saving!!
