Adapted from CFED's Legislative Proposals: SWFA

When providing information and referral for people with disabilities attempting to enroll in asset building programs, one of the most frequent obstacles is not accessibility; it is the lack of available programs. In order for Individual Development Accounts and other asset building measures to be truly effective, expansion is necessary. The World Institute on Disability's Access to Assets programs supports the Savings for Working Families Act and the tax credit proposals made in S.476. ATA urges all disability and asset building advocates to back SWFA. After nearly passing three years in a row, the Savings for Working Families Act - a proposed federal IDA Tax Credit - was reintroduced in the Senate as a part of a broad charitable giving bill, known as the Charity, Aid, Recovery and Empowerment (CARE) Act. On April 9, the CARE Act, S. 476, was passed by the Senate. If this version were signed into law by the President, $450 million would be made available in IDA Tax Credits to match the savings of working families and would allow for up to 300,000 IDAs to be created.

The IDA Tax Credit would work by providing financial institutions with a dollar-for-dollar tax credit for every dollar they contribute as matching funds for IDAs, up to $500 per IDA per year. The Credit would substantially expand the amount of matching funds available for IDAs and cement them as an asset-building tool for low-income Americans in the federal tax system.

Cosponsored by Senators Chuck Grassley (R-IA) chairman of the Committee on Finance, Max Baucus (D-MT) ranking member of the Committee on Finance, Rick Santorum (R-PA) and Joseph Lieberman (D-CT) and supported by President Bush, the strongly bipartisan IDA Tax Credit proposal is backed by a coalition of organizations representing the financial, nonprofit, academic, and corporate sectors.

On May 7, 2003 the House of Representatives introduced a comparable charitable giving bill, H.R. 7, that does not include the IDA tax credit. Instead, the legislation sponsored by House Minority Whip Roy Blunt (R-MO) and Representative Harold Ford (D-TN) includes language that would reauthorize the Assets for Independence Act (AFIA). Efforts will be made to include SWFA in the final CARE/Charitable Giving legislation and to reauthorize AFIA through a separate process this year.

According to the report produced by the Center for Community Capitalism at the University of North Carolina- Chapel Hill, 56% of IDA programs' financial institution sponsors are unaware of the proposed tax credit legislation. This is despite the fact that they would be the beneficiaries of the credits. In order for SWFA to move forward, action is needed to encourage Representatives to adopt the Senate tax credit proposals and to pressure further action on the CARE Act.

For more information on how to help, see the Corporation for Enterprise Development IDA Advocacy Center.

In addition, see our Resources section on savings planning.