michigan’s individual development account tax credit michigan ida partnership
TRANSCRIPT
Michigan’s Individual Development Account Tax Credit
Michigan IDA Partnership
Objectives
What is MIDAP? What is an Individual Development Account
(IDA)? How does the IDA tax credit support IDAs? What kind of success have IDAs had in
Michigan? Questions
Michigan IDA Partnership (MIDAP)
The Michigan IDA Partnership is a statewide collaborative of over 35 Individual Development Account programs and their 5 Regional Coordinating Organizations, established in 2001 with the purpose to provide coordination, training, and technical assistance to IDA program sites across the state of Michigan.
MIDAP is responsible for overseeing the donations received for the IDA tax credit.
MIDAP is coordinated through Oakland Livingston Human Service Agency (OLHSA).
MIDAP’s Regional Coordinating Organizations
(RCO)
Detroit Region RCO:United Way for Southeast Michigan (UWSEM)
Northern Region RCO:Northwest Michigan Community Action Agency (NWCAA)
Southern Region RCO:Community Action Agency (CAA)
Thumb Region RCO: Oakland Livingston Human Service Agency (OLHSA) Western Region RCO:
Inner City Christian Federation (ICCF)
Detroit Region RCO:United Way of Southeastern Michigan(UWSEM)
United Way of Southeastern Michigan660 Woodward Avenue, Suite 300Detroit MI. 48226Monica [email protected], 313-226-9324 fax
UWSEM’s Program Sites Common Ground Sanctuary, Royal Oak Focus: Hope, Detroit Habitat for Humanity of Detroit, Detroit New Haven Medical Center, New Haven Southwest Housing Solutions, Detroit YMCA of Metro Detroit, Detroit YWCA of Western Wayne, Inkster, Dearborn
Northern Region RCO:Northwest Michigan Community Action Agency(NMCAA)
Northwest Michigan Community Action Agency3963 Three Mile Rd.Traverse City MI. 49686Karen [email protected], 231-947-4935 fax
NMCAA’s Program Sites Gogebic-Ontonagon CAA, Ironwood Mid-Michigan CAA, Clare Northeast Michigan CSA, Alpena Northwest Mi. CAA, Traverse, Cadillac, Petoskey
Southern Region RCO:Community Action Agency (CAA)
Community Action Agency (CAA)1214 Greenwood Ave,Jackson MI. 49203Toby [email protected], 517-784-5188 fax
CAA’s Program Sites Capital Area Community Services, Corunna Community Action Agency, Jackson, Hillsdale, Adrian Franklin Street Community Housing Corporation, Lansing Housing Services of Eaton County, Charlotte Kalamazoo Neighborhood Housing Services, Kalamazoo Monroe County Opportunity Program, Monroe POWER, Ypsilanti Southwest Michigan Community Action Agency, Benton Harbor
Thumb Region RCO:Oakland Livingston Human Service Agency(OLHSA)
Oakland Livingston Human Service Agency (OLHSA)196 Cesar E ChavezPontiac MI. 48343Heidi [email protected], 248-209-2645 fax
OLHSA’s Program Sites CAA of St Clair County, Port Huron Flint Neighborhood Improvement and Preservation Project, Flint Human Development Commission, Caro Lighthouse of Oakland County, Pontiac Macomb County CSA, Macomb Oakland Livingston HSA, Pontiac, Howell Saginaw Family Network, Saginaw Saginaw Habitat for Humanity, Saginaw Wayne Metro CAA, Ecorse
Western Region RCO: Inner City Christian Federation (ICCF)
Inner City Christian Federation (ICCF)920 Cherry SEGrand Rapids MI. 49506Elzie [email protected], 616-336-9323 fax
ICCF’s Program Sites ICCF, Grand Rapids Grand Rapids Opportunities for Women Neighbors Plus, Holland NCCS Center for Nonprofit Housing, Fremont, Muskegon Heights
IDA: What Are They?
An IDA is a matched savings account for: Buying a Home Starting or Expanding a Small Business Post Secondary Education or Job Training
Savings, up to $1,000, is matched as follows: 3:1 for homeownership 2:1 for small business and post secondary education
Participation Requirements
Must be employed Income cannot exceed guidelines Agree to save a minimum of $20 per month from
earnings Agree to complete Asset Specific education and
financial education Agree to address any debt and credit issues Agree to stay in program a minimum of 6 months
Funding for IDAs
Grants from Department of Health & Humans Services-Assets for Independence (AFI) Program
– These grants require a 1:1 match of non-federal money– The majority of this funding provides for the match on accounts.– 15% can be used for certain administrative costs
Grants from the Michigan State Housing Development Authority– Provides the non-federal match for the AFI grant– Provides support for RCO functions– Provides support to program sites for direct service activities (i.e. financial
education, credit counseling)– Provides support for the operations of MIDAP
Grants from financial institutions– Provides non-federal match for the AFI grant and direct service resources
to program sites Tax Credit Donations
Michigan State Income Tax Credit for IDA contribution
Credit passed in 2008 (P.A. 450)– 75% Michigan State income tax credit
Subtracted from what taxpayer owes on state return
– Non-refundable– $1 million maximum credits per year– No limit on amount of individual or corporate
contribution that can be claimed for credit
Michigan State Income Tax Credit for IDA contribution
All contributions received are allocated to five RCOs in December of each year
Allocation is based on the number of active IDA accounts in that calendar year
Funds are used for IDA match and direct service– Direct service includes classes and counseling to help IDA
account holders succeed in saving and purchasing assets
Michigan State Income Tax Credit for IDA contribution
RCOs use tax credit funds to apply for matching funds from federal government
– Assets for Independence Act (AFI) $25 million available nationally
Funds are combined with other non-federal funds received, for instance from the Michigan State Housing Development Authority (MSHDA)
Upon award all funds, federal and tax credit contributions are placed in specific restricted account for IDA use only
How to contribute
Checks should be made payable to MIDAP– Contributions must be dated no later than December 31 for
a tax credit in that year Checks may be sent to any of the RCO sites care of
the IDA program MIDAP is managed by OLHSA a 501 c 3 A letter of acknowledgement for the contribution will
be sent by OLHSA Contributions to MIDAP are tax deductible for federal
taxes
How to contribute
For more information contact MIDAP at OLHSA– (248) 209-2691– www.midap.info
Click on tax credit tab
IDA Success Summary
Statewide, as of December 31, 2009:
Homeownership Accounts 1,125
Education Accounts 288
Business Accounts 182
Total Participant Savings Used $1,497,571
Total Match Amount $4,614,481
Current Mortgages Leveraged $88,439,605
Local IDA Success
Questions?