Saving and Asset Building Information
There are a variety of programs, both federal and statewide, that assist individuals. A few of these programs are listed below.
Individual Development Accounts
An Individual Development Account (IDA) is a special savings program where money saved (even EITC returns) is matched to help families accumulate more money to invest in a home, education/job training or a small business. A family must apply to participate in an IDA program through organizations that offer the program (there are over 50 programs in the state and you can find one near you by visiting http://www.cmif.org under Michigan IDA Partnership) The basic requirements are income related (i.e. under 200 percent poverty), completion of an economic literacy course and training related to an investment goal, and saving money toward that investment goal. Once completed, savings of up to $1,000 are matched at a ratio of 3:1 for a home purchase and 2:1 for post-secondary education/job training or to start or expand a small business. IDA programs help low-income families plan for a more secure financial future. The EITC refund could be used to meet the IDA participants savings goal.
Michigan 529 Savings Programs
Michigan Education Savings Program
Opening up a saving/investment account for your child's future has never been easier. The Michigan Education Saving Program (MESP), run through the Michigan Department of Treasury, is another great way to use an EITC return to invest in your child's future education. A MESP account is an investment account that, over time, can help your money grow into a nest egg for your child's college education. The State of Michigan will even match some of your savings if you open an account for a child less than six years of age and your household income is less than $80,000 a year. You can learn more by visiting the MESP Web site at http://www.misaves.com/ MESP can help you and your child plan for their future today.
Michigan Education Trust
The Michigan Education Trust exists to provide an avenue for families to invest in their child's future financial ability to attend a Michigan institution of higher education. By investing a fixed amount today, a "nest egg" is created which grows in value during the years between the initial investment and the individual's admission to college. To find out more about the Michigan Education Trust, visit http://www.michigan.gov/treasury/.
Additional tax benefits for education
To find out more information about other tax benefits for education, check out IRS Publication 970 at http://www.irs.gov/pub/irs-pdf/p970.pdf.