Kansas Family Medical Assistance
Manual (KFMAM)
Eligibility Policy - 11/22/2024
5436
5437 Individual Development Accounts (IDA) - The interest on an allowable individual development account (IDA), including authorized matching contributions and accrued interest, is exempt as income as long as the account is maintained. For Working Healthy, income deposited into an IDA is also exempt in the month deposited. IDAs are exempt resources for all programs. An allowable IDA meets the following guidelines:
5437.01 - It is established by or on behalf of a TAF recipient or by or on behalf of an individual participating in the Assets for Independence Demonstration Program (AFIA) and is used for a qualified purpose.
5437.02 - A qualified purpose is one or more of the following:
(a) - post-secondary education expenses for college or vocational-technical school. Learning Quest or other 529 accounts are not considered IDAs;
(b) - first home purchase (must not have owned a home within three years of acquisition); or
(c) - business capitalization (business plan must be approved by financial institution or non-profit loan fund).
NOTE: Any funds withdrawn from an IDA and used for any purpose other than one of those listed above shall count as unearned income in the month withdrawn.
5437.03 - The IDA must be a trust funded through periodic contributions by the establishing individual and may be matched by or through a qualified entity for a qualified purpose.
5437.04 - A qualified entity to match IDA funds for a TAF recipient is either a not-for-profit organization described in section 501(c)(3) of the IRS code of 1986 and exempt from taxation under section 501(a) or a state or local government agency acting in cooperation with a 501(c)(3) organization. For AFIA participants, matching contributions are made by the federal government through a grantee.
5437.05 - AFIA recipients may only contribute to IDAs with income derived from earnings.
Note: The earnings of an adult placed in an IDA are counted as earned income in the month earned.
5437.06 - Parents may establish IDAs for their children as well as for themselves. Children may also contribute their earnings to accounts established by or for them.