305 ILCS 5/12-4.103

Current through Public Act 103-1052

Section 305 ILCS 5/12-4.103 - Individual Development Accounts

Subject to funding availability, the Illinois Department shall establish a program that allows eligible low-income individuals to open and maintain Individual Development Accounts for the purpose of enabling the individual to accumulate funds for a qualified purpose. A qualified purpose for establishing an Individual Development Account shall be one or more of the following:

(1) to pay for postsecondary education expenses if the expenses are paid directly to an eligible educational institution;

(2) to acquire a principal residence if the individual is buying a home for the first time and if the funds are paid directly to the person to whom the amounts required for the purchase are due; or

(3) to finance business capitalization expenses if the funds are paid directly into a business capitalization account at a federally insured financial institution and are restricted to use solely for qualified business capitalization expenses.

An individual may make contributions to his or her Individual Development Account only from earned income as defined in Section 911(d)(2) of the Internal Revenue Code of 1986.

An Individual Development Account program shall be established in accordance with subsection (h) of Section 404 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. State funds made available for this program and federal funds, to the extent they may be used for this purpose, shall be used (i) to match, dollar for dollar, contributions made by individuals participating in an Individual Development Account program approved by the Illinois Department, (ii) to fund or supplement other funds available for the costs of the administration of an Individual Development Account program by a not-for-profit organization, and (iii) for a grant or grants to not-for-profit organizations to provide technical assistance and training to other not-for-profit organizations in the State that wish to establish an Individual Development Account program consistent with this Section. No Individual Development Account program shall qualify for State funds under this Section unless the administering not-for-profit organization verifies that it has secured at least a dollar for dollar match from other sources for contributions made by participating individuals.

The Illinois Department shall by rule establish qualifications for a not-for-profit organization to administer an Individual Development Account program. The Illinois Department shall establish eligibility criteria for individuals seeking to participate in an Individual Development Account program. The Illinois Department shall promulgate rules regarding the administration of Individual Development Account programs by approved not-for-profit organizations administering the programs.

Notwithstanding any other provision of State law, funds in an Individual Development Account, including accrued interest and matching deposits, shall be disregarded for the purpose of determining the eligibility and benefit levels under this Code of the individual establishing the Individual Development Account with respect to any period during which such individual maintains or makes contributions into such an account. Nothing in this Section shall prohibit a not-for-profit organization which does not receive State matching funds from administering an approved Individual Development Account under this Section.

305 ILCS 5/12-4.103

P.A. 90-783, eff. 8/14/1998.