Asset-Building Incentives

Earlier in this article we explained how Plans to Achieve Self-Support (PASS) are a special savings program for people on Supplemental Security Income (SSI) and how an ABLE account lets you save up to $100,000 in resources and not have them counted by SSI. However, there is another great savings program that is for anybody with a low income, even if you don’t get SSI benefits.

Individual Development Accounts (IDAs)

Individual Development Accounts, also known as IDAs, are special savings accounts. You choose a goal to save for and use the IDA account to save money towards meeting that goal. IDA goals are often things like buying a first home, paying for education or training costs, or funding a small business.

The money you put into the account will be matched by other sources. The match may be anywhere from one to 4 times the amount of the deposit you make. For example, if you’re enrolled in an IDA program with a 2:1 match and you deposit $50 into your account, the program will add an additional $100 towards your savings goal.

Note: There aren't as many IDA programs as there used to be. Some are still active, but it can take a bit of effort to find one that is accepting applications.

Generally, to qualify for an IDA:

• Your annual income must be within 200% of the Federal Poverty Guidelines ($30,120), and
• You must have some form of earned income.

Once you’re enrolled in the program, you will also need to take financial education classes.

If you are interested in starting an IDA, find an IDA program in your area. There are good IDA program directories at the Prosperity Now and the Assets for Independence Resource Center.

You can also click here to learn more. If you have a work goal or are currently working, a Work Incentive Consultant can answer your questions.

Earned Income Tax Credit (EITC)

The Earned Income Tax Credit (EITC) is designed to help people who are working and have low incomes by lowering the amount of federal income tax they owe. Even if you don’t earn enough money to owe federal income taxes, you may be eligible for an EITC.

To get the EITC, you must claim it when you file your annual federal tax return. For tax year 2024 (filing by April 2025), the EITC ranges from $2 to $7,830, depending on your adjusted gross income and the number of qualifying children in your family.

To qualify, you must have income from employment, self-employment, or employer-paid disability benefits that you got before retirement. There is no limit to the number of times you can claim an EITC; you can claim the tax credit every year that you are eligible.

If you have a work goal or are currently working, a Work Incentive Consultant can answer your questions.