Missouri First-Time Homebuyer Savings Account

As of January 1, 2019, Missouri residents can open a First-Time Homebuyer Savings Account and deduct the contributions to that account on their income tax returns.

Who is considered a First-Time Homebuyer?

A ‘first-time homebuyer” is an individual who has never owned a home or a divorced individual that has not been listed on the title/deed for at least three consecutive years.

What are the advantages of opening a MO First-Time Homebuyers Saving Account?

• This account allows you to deduct 50% of your contributions to the savings account each tax year.
• Interest earnings are not taxable.

What you need to know about the account.

• The maximum annual deduction is $800 for an individual and $1,600 for a married couple filing jointly.
  • The deduction cannot exceed the taxpayer’s Missouri adjusted gross income for the tax year.
• Maximum eligible contributions, per yer, to the account are $1,600 for an individual and $3,200 for a married couple filing jointly.
• Maximum eligible contributions for all tax years is $25,000.
• Maximum total balance in the account is $50,000.
• An individual or couple opening the savings account must designate a qualified beneficiary by April 15th of the year following the date the account was opened.
• To qualify for the tax benefit, the Account holder is responsible for maintaining any documentation of deposits and expenditures for the account.
  • The financial institution does not hold any liability, especially if funds are not used properly.
• You will lose your exemption if you withdraw money from the account if you made your first deposit into the account less than a year earlier or use the money for ineligible expenses.

What are Eligible Expenses or Withdrawals?

• Expenses to buy a primary residence in Missouri.
• Expenses to buy a primary residence outside Missouri for an active-duty military person stationed in Missouri anytime after account creation.
• Expenses that would have qualified under one of the previous provisions, except that the contract for the purchase did not close.
• Transfer to another newly created first-time homebuyer savings account.
• Service fees on the account (which we don’t have any).