DuTrac is proud to offer the Iowa First Time Homebuyer Savings Account (IFTHSA) to all Iowa members.
IFTHSA is a savings account created by the Iowa legislature to help Iowans save for their first home. It includes provisions that allow individuals, including those who already own a home, to make tax-deductible contributions into an account to be used by a designated person saving to own a first home. The account can be used for a down payment and closing costs for a principal residence in Iowa. The account may be established by an Iowa resident as long as each established account has a specified designated beneficiary.
A designated beneficiary is the person who will utilize the funds within the account to purchase a home. The person who establishes the account and the Designated Beneficiary do not need to be the same person. A designated beneficiary must qualify as a first-time homebuyer at the time the account is established and at the time the funds within the account are used for a home purchase.
There are many advantage for obtaining an Iowa First Time Homebuyer Savings Account including:
• Income from interest earned on an IFTHSA is not taxable on state of Iowa tax returns.
• The account is interest bearing.
• There are no maximum contribution limits (only deductible limits)
• The state of Iowa tax deduction for account contributions is available for up to ten years.
• Allowable deduction limits for contributions adjust annually for inflation.
Tracking and Reporting:
All reporting is the responsibility of the account holder. All documents needed to maintain and update the account will be provided by the State of Iowa- Revenue Department. This includes all of the following:
• Beneficiary Designation
• Beneficiary Changes
• Verification of withdrawals/destination of withdrawn funds
• Ensuring the account satisfies all of the requirements set out by the state
• Reporting of any tax penalties related to the use of the account
• Forms will be available at https: Iowa Government Taxes