How Do You Qualify for an IDA Grant: Income, Assets, and Savings Goal

To qualify for an IDA grant, your household generally needs income at or below 200 percent of the Federal Poverty Guidelines, a net worth under $10,000 (not counting your primary home and one vehicle), and earned income from a job or self-employment. You also need to live in an area served by an active sponsoring organization, complete financial education, and commit your savings to one of three approved goals: a first home, postsecondary education, or a small business.

Income Limit

Under the most common federal framework, your household income must fall at or below 200 percent of the Federal Poverty Guidelines (FPG), a threshold the Department of Health and Human Services updates each year.¹ If your household already receives TANF benefits, you typically meet the income requirement automatically.

For 2026, the 200 percent FPG limits for the 48 contiguous states and Washington, D.C. are:

1 person: $31,920
2 people: $43,280
3 people: $54,640
4 people: $66,000
5 people: $77,360
6 people: $88,720
7 people: $100,080
8 people: $111,440

Add $11,360 for each additional person beyond eight. Alaska and Hawaii use higher figures — a four-person household can earn up to $82,500 in Alaska and up to $75,900 in Hawaii.²

Some programs use Area Median Income (AMI) instead of, or alongside, the FPG. Check with the local sponsoring organization to confirm which measure applies to you.

Net Worth Cap

Your household’s net worth cannot exceed $10,000 as of the end of the calendar year before you apply. Net worth is the market value of everything your household owns minus everything it owes.³

Two big assets sit outside that calculation: your primary residence and one motor vehicle. You can own the home you live in and a car without either counting toward the cap.³ State-funded programs sometimes set different thresholds, so ask the specific program what its limit is.

Earned Income From Work

You need earned income, because only earned income can be deposited into an IDA. Federal regulations restrict deposits to money earned from employment or self-employment.⁴ Social Security payments, disability benefits, child support, and other passive or government income do not count for deposit purposes. You can keep receiving those benefits for living expenses; the restriction applies only to what goes into the account.

Programs verify earnings with pay stubs, W-2s, or tax returns. If you work for yourself, business income records serve the same purpose.

An Approved Savings Goal

You only qualify if your savings goal matches one of the three approved uses. The combined savings and match can be spent on:

A first home purchase, covering down payment, closing costs, and other acquisition expenses. You count as a first-time homebuyer if neither you nor your spouse has owned a principal residence in the three years before the purchase date.⁴
Postsecondary education, covering tuition, required fees, books, supplies, and equipment at an eligible educational institution.⁵
Small business startup, covering capital, equipment, working capital, and inventory expenses under a qualified business plan.⁵

An Available Program in Your Area

Meeting the financial rules only helps if there’s a program open to you. Most IDAs are run by local nonprofits, community action agencies, or government offices, and each one serves a defined geographic area tied to its funding source. A program in one county may not accept applicants from the next one over.

Availability has narrowed since the federal Assets for Independence (AFI) program stopped receiving new appropriations after fiscal year 2016. Today most IDAs run on state TANF funds, state legislation, or private partnerships, and waiting lists are common. To find one, contact your state or county TANF office, a local Community Action Agency, or a United Way chapter. The Administration for Children and Families keeps information at its Office of Community Services website.⁶

Financial Education and the Savings Agreement

Passing the income and asset tests isn’t the whole picture. Every program requires you to complete financial literacy training before you can draw on matching funds. Requirements range from a single workshop to ten or more hours covering budgeting, credit, debt, and basic investing. Many programs add asset-specific training too, such as homeownership counseling if you’re buying a house or business plan development if you’re starting a company.⁷

Once accepted, you sign a Savings Agreement with the sponsoring organization. It sets out your approved goal, the match rate (federal rules allow anywhere from $1-for-$1 up to $8-for-$1),⁸ the maximum amount of your personal savings that will be matched, and your savings timeline. Programs typically run up to three years, with some allowing extensions to five.

Documents You’ll Need to Prove Eligibility

Requirements vary, but plan to bring:

A government-issued photo ID such as a driver’s license, state ID, or passport.
A recent federal tax return, usually from the most recent filing year, to document household income.
At least two consecutive weeks of pay stubs for every wage earner in the household.
Bank statements for all existing accounts to verify assets and net worth.

Programs also use intake forms covering household size, monthly expenses, and debts. Incomplete applications are the most common cause of delay, so gather everything before you file.

How Qualifying Affects Your Benefits and Taxes

Funds in a federally funded IDA — your deposits, the match, and any interest — are generally disregarded when a federal means-tested program looks at your eligibility. Federal regulations require that treatment.⁴ For SSI, both your deposits and the match are excluded from the resource limit.⁹ For federal housing assistance such as Section 8 and public housing, IDA amounts are similarly excluded from income calculations.¹⁰

This protection applies to IDAs funded through federal programs like TANF or the former AFI program. If you enroll in one funded entirely by a private organization with no federal funding, the money may count as a resource and could affect SSI, Medicaid, or food assistance.¹¹ Confirm the funding source before enrolling if you receive means-tested benefits.

On taxes, matching funds you receive at qualified withdrawal are not taxable. The IRS treats them as a gift excluded from gross income.¹²

1
Federal Register. Annual Update of the HHS Poverty Guidelines
2
U.S. Department of Health and Human Services. 2026 Poverty Guidelines
3
Administration for Children & Families. AFI Legislation: Assets for Independence Act 42 USC 604
4
eCFR. 45 CFR Part 263 Subpart C – What Rules Apply to Individual Development Accounts
5
eCFR. 45 CFR 263.20 – What Definitions Apply to Individual Development Accounts (IDAs)
6
Administration for Children & Families. Assets for Independence (AFI)
7
The Administration for Children and Families. Individual Development Accounts
8
Administration for Children & Families. AFI Match Rates Quick Sheet
9
Social Security Administration. Individual Development Accounts (IDAs) – Demonstration Project
10
Federal Register. Federally Mandated Exclusions From Income – Updated Listing
11
Social Security Administration. SSI Spotlight on Individual Development Accounts
12
Internal Revenue Service. Rev. Rul. 99-44