Gov. Dave Heineman announces the signing of three bills that bring tax relief to Nebraskans, including LB296, which increases the state tax deduction for Nebraska account owners in the Nebraska college savings program. Second from right is Sen. Galen Hadley, who sponsored the bill. Also present is Sen. Lydia Brasch, who made it her priority bill.

Today Gov. Dave Heineman gave Nebraska the ultimate gift of education as he signed into law LB296. The new law will allow account owners of Nebraska’s 529 College Savings Plans (NEST) an increased state income tax deduction for contributions into their accounts. Beginning in 2014, account owners will be able to deduct $10,000 for a single person or a married couple filing jointly or $5,000 if married as a single filer, increasing the deduction from the current amounts of $5,000 and $2,500.

LB296 passed in the Nebraska Unicameral on May 29, which coincidentally, was 529 College Savings Day. This measure was introduced by Sen. Galen Hadley in the 2013 legislative session and was made a priority bill by Sen. Lydia Brasch. Along with the increased tax deduction, LB296 includes two additional provisions:

1. In the event of the death of the account owner where there is no named successor account owner, the beneficiary will become the account owner.
2. Parents or guardians who are custodians of UTMA/UGMA (Uniform Transfers to Minors Act and Uniform Gift to Minors Act) accounts will be allowed to take a state-income tax deduction for their contributions into these minor-owned accounts.

Nebraskans have embraced saving for higher education through NEST, and with the passage of LB296 the number of families investing is expected to grow. More than 57,000 Nebraska families are currently saving for college with NEST plans, accounting for more than $670 million in assets. In total, there are more than 203,000 NEST accounts with more than $3 billion in assets. In addition to Nebraskans saving with NEST, more than $6 million is withdrawn annually to pay for qualified expenses at Nebraska institutions.

“We have one of the best college savings plans in the country and with the passage of this legislation our NEST plans become even stronger,” Nebraska State Treasurer and Trustee of NEST Don Stenberg said. “Nebraska families now have additional incentive to save for higher education -- one of the best lifetime investments a family can make. We are very proud of our NEST college savings plans and the value they provide for families looking for responsible and effective ways to save for college.”

“The word is getting out and Nebraskans are truly realizing the value of NEST college savings plans,” said Deborah Goodkin, Managing Director of NEST at First National Bank of Omaha, the NEST Program Manager. “Parents are starting to save when their children are younger to ensure a successful future. First National Bank has the unique ability to reach out to families across the state letting them know the benefits of saving with NEST. We’re very proud of the growth NEST has seen as well as the NEST scholarships totaling more than $100,000 First National gives annually to generate excitement about children dreaming for their future and creating a plan to achieve those dreams.”

The Nebraska Educational Savings Trust offers four college savings plans: the NEST Direct College Savings Plan, the NEST Advisor College Savings Plan, the TD Ameritrade 529 College Savings Plan, and the State Farm College Savings Plan.

First National Bank of Omaha is the program manager, and investments are approved by the Nebraska Investment Council.

With Gov. Heineman for the signing of LB296 are, far right, Sen. Galen Hadley, who introduced the bill, and Sen. Lydia Brasch, standing next to the governor, who made LB296 her priority bill.

Photo Courtesy Governor’s Office