Iowa Code 541B.3 – First-time homebuyer savings account
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1.
Establishment of account.
a. Beginning January 1, 2018, an individual may open an interest-bearing savings account with a financial institution and designate the entire account as a first-time homebuyer savings account for the purpose of paying or reimbursing a designated beneficiary‘s eligible home costs in connection with a qualified home purchase. The first-time homebuyer savings account designation shall be made no later than April 30 of the year following the tax year during which the account is opened, on forms provided by the department.
b. A married couple electing to file a joint Iowa individual income tax return may establish a joint first-time homebuyer savings account. Married taxpayers electing to file separate tax returns for Iowa tax purposes shall not establish or maintain a joint first-time homebuyer savings account.
c. An individual may establish more than one first-time homebuyer savings account, provided each account has a different designated beneficiary.
Terms Used In Iowa Code 541B.3
- Account: means the same as defined in section 554. See Iowa Code 554E.1
- Account holder: means an individual who establishes, either individually or jointly with the individual's spouse, a first-time homebuyer savings account pursuant to section 541B. See Iowa Code 541B.2
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Department: means the department of revenue. See Iowa Code 541B.2
- Designated beneficiary: means an individual meeting the requirements of section 541B. See Iowa Code 541B.2
- Eligible home costs: includes any United States veterans administration funding fee incurred by, or charged or assigned to, a designated beneficiary in connection with a veterans administration home loan guaranty program. See Iowa Code 541B.2
- Financial institution: means a state or federally chartered bank, savings and loan association, credit union, or trust company in this state. See Iowa Code 541B.2
- First-time homebuyer: means an individual who is a resident of Iowa and who does not own, either individually or jointly, a single-family or multifamily residence, and who has not owned or purchased, either individually or jointly, a single-family or multifamily residence for a period of three years prior to all of the following:a. See Iowa Code 541B.2
- First-time homebuyer savings account: means an account that meets the requirements of sections 541B. See Iowa Code 541B.2
- following: when used by way of reference to a chapter or other part of a statute mean the next preceding or next following chapter or other part. See Iowa Code 4.1
- Individual: means a natural person. See Iowa Code 541B.2
- Qualified home purchase: means , with respect to a first-time homebuyer savings account, the purchase of a single-family residence in Iowa by the account's designated beneficiary ninety or more days after the date the account holder first opened a first-time homebuyer savings account. See Iowa Code 541B.2
- year: means twelve consecutive months. See Iowa Code 4.1
2.Designation of beneficiary.a. The account holder shall designate one individual as beneficiary of the first-time homebuyer savings account. The designation shall be made on forms provided by the department and no later than April 30 of the year following the tax year during which the account is opened. The account holder may change the designated beneficiary of the first-time homebuyer savings account at any time.b. The account holder and designated beneficiary of a first-time homebuyer savings account may be the same individual.c. An individual may be the designated beneficiary of more than one first-time homebuyer savings account.d. The designated beneficiary of a first-time homebuyer savings account must be a first-time homebuyer.