Corpus

Duties of account holders; contribution to first-time home buyer savings accounts excluded from gross income; limitations on amount of contributions; penalty for withdrawal of monies for purpose other than payment of eligible costs; financial institution obligations regarding accounts.

Miss. Code Ann. § 27-7-1103
in effect
Sign in to generate a plain English summaryAsk Belisarius Agent
An account holder shall be responsible for the use or application of monies or funds in an account for which the account holder claims first-time home buyer savings account status. An account holder shall: Not use monies or funds held in an account to pay expenses of administering the account, except that a service fee may be deducted from the account by a financial institution; Maintain documentation of the segregation of monies or funds in separate accounts and documentation of eligible costs for the purchase of a single-family residence in this state (such documentation may include the settlement statement); and File with the account holder’s Mississippi income tax return forms developed by the Department of Revenue regarding treatment of the account as a first-time home buyer savings account under this article, along with the federal Form 1099 issued by the financial institution for such account. Except as otherwise provided in this article and Section 27-7-15, amounts contributed to and all interest or other income earned attributable to an account and monies or funds withdrawn or distributed from an account for the payment of eligible costs by or on behalf of a qualified beneficiary shall be excluded from the gross income of the account holder as provided under Section 27-7-15. The amount of contributions made by an account holder in any tax year to a first-time home buyer savings account to be excluded from gross income as provided under Section 27-7-15 shall not exceed Two Thousand Five Hundred Dollars ($2,500.00) for any account holder who files an individual return. The amount of contributions made by an account holder in any tax year to a first-time home buyer savings account to be excluded from gross income as provided under Section 27-7-15 shall not exceed Five Thousand Dollars ($5,000.00) for any married couple who are joint account holders and file a joint return. Only cash and marketable securities may be contributed to an account. name Upon being furnished proof of the death of an account holder, a financial institution shall distribute the principal and accumulated interest or other income of the account in accordance with the terms of the contract governing the account. If monies or funds are withdrawn from an account for any purpose other than the payment of eligible costs by or on behalf of a qualified beneficiary, then such monies or funds withdrawn from an account shall be added to gross income as provided in Section 27-7-15. In addition, there shall be imposed a penalty calculated using the federal Form 1099 showing the amount of income exempted from state income tax and assessing a ten percent (10%) penalty on the amount of such exempted income. However, the penalty shall not apply to the extent of monies or funds withdrawn that were (a) withdrawn by reason of the qualified beneficiary’s death or disability, (b) a disbursement of assets of the account pursuant to a filing for protection under the United States Bankruptcy Code, 11 USCS Sections 101 through 1330, or (c) transferred from an account established under this article into another account established under this article for the benefit of another qualified beneficiary. Financial institutions shall not be required to: Designate an account as a first-time home buyer savings account, or designate the beneficiaries of such accounts, in the financial institutions’ account contracts or systems or in any other way; Track the use of funds withdrawn from such accounts; Allocate funds in such accounts among joint account owners or multiple beneficiaries; or Report any of the information described in (i), (ii) or (iii) to the Department of Revenue or other governmental agency. In addition, financial institutions shall not be responsible for or liable for: Determining or ensuring that an account satisfies the requirements to be a first-time home buyer savings account; Determining or ensuring that costs are eligible costs; Reporting or remitting taxes or penalties for such accounts; or Ensuring that an account holder meets his or her obligations under this section in any way. Financial institutions shall be held harmless by the Department of Revenue for any actions taken with respect to a first-time home buyer savings account, and the account holder shall indemnify and hold harmless his or her financial institution and its successors and assigns from and against claims, damages, losses, penalties and expenses, including, but not limited to, reasonable attorney’s fees arising out of or resulting from their first-time home buyers savings account. The Department of Revenue shall have all powers necessary to implement and administer this article, and the department shall promulgate rules and regulations, in accordance with the Mississippi Administrative Procedures Law, necessary for the implementation of this section. However, s uch guidelines shall not apply to, or impose administrative, reporting, or other obligations or requirements on, financial institutions-related accounts for which first-time home buyer savings account status is claimed by the account holder. Any person who knowingly prepares or causes to be prepared a false claim, receipt, statement or billing to avoid or evade taxes or penalties upon the withdrawal of money or funds from an account is guilty of a misdemeanor, and upon conviction, shall be punished as provided in Section 99-19-31.