Current through Register Vol. 46, No. 19, March 20, 2024
(1)
Approved purposes for withdrawal
of funds from an IDA. An account holder may withdraw principal and
income earned on principal from an IDA only with the written approval of the
operating organization and only for the following approved purposes:
a. Educational costs at an accredited
institution of higher education, which costs include, but are not limited to,
tuition, laboratory fees or other fees for use of facilities, books, and other
supplies.
b. Training costs for an
accredited or licensed training program, or training program approved by the
division, which costs include, but are not limited to, tuition, laboratory fees
or other fees for use of facilities, books, and other supplies.
c. Purchase of a primary residence.
d. Capitalization of a small business
start-up.
e. An improvement to a
primary residence which increases the tax basis of the property.
f. Emergency medical costs for the account
holder or for a member of the account holder's family. However, only one
withdrawal from an IDA can be made for this purpose, and the amount of the
withdrawal shall not exceed 10 percent of the account balance at the time of
the withdrawal.
g. Purchase of an
automobile.
h. Purchase of
assistive technology, home or vehicle modification, or other device or physical
improvement to assist an account holder or family member with a
disability.
(2)
Conditions on withdrawals of principal and income. An account
holder may withdraw funds from the account holder's IDA subject to the
following conditions:
a. Any amount of
principal and income earned on principal, provided the sum is authorized under
subrule 25.6(1) and in accordance with the procedure for authorized withdrawals
set forth under subrule 25.6(3).
b.
If the account holder is 59½ years of age or older, any amount of
principal and income earned on principal. Such withdrawals shall not require
the approval of the operating organization.
(3)
Procedures for account holder
deposits and withdrawals. The following procedures (or such other
procedures as agreed upon by the operating organization and financial
institution to facilitate authorized withdrawals) shall apply to account holder
deposits and withdrawals from an IDA:
a. For
deposits, the account holder shall fill out and sign a deposit form provided by
the operating organization, indicating the amount and date of a deposit by the
account holder into the IDA, and shall submit the form to the financial
institution. The form shall be signed by the financial institution, which shall
send copies to the account holder and the operating organization.
b. For a withdrawal, the account holder shall
fill out and sign a withdrawal form provided by the operating organization,
indicating the amount, date, and purpose of the withdrawal. The account holder
shall submit the form to the operating organization or its designated agent for
approval and signature. The operating organization shall retain a copy and
submit the withdrawal form to the financial institution to implement the
electronic transfer of the funds or issuance of a check, payable to the account
of the vendor as payment for an approved purpose for the withdrawal; or, if
neither electronic transfer nor check issuance is possible or cost-effective,
then the financial institution shall issue a two-party payee check made out to
the account holder and to the vendor. If the approved purpose is for
capitalization of a small business, the check shall be payable to the account
holder's business account at a financial institution and to the vendor
requiring payment for providing the service or product relative to the account
holder's business.