Stenberg Reminds Nebraskans to Consider Year-End, Tax-Deductible Contributions to NEST 529, Enable

Nebraska taxpayers are reminded that contributions to accounts in the Nebraska Educational Savings Trust (NEST 529) and the Enable Savings Plan must be made by December 31 to qualify for the 2018 tax year state income tax deduction, State Treasurer Don Stenberg said today.

Contributions to an account in either plan are deductible up to the maximum of $10,000 or $5,000 if married, filing separately. For the NEST 529 plans, only account owners can deduct their own contributions. For Enable, any contributor to an account can claim a tax deduction for his or her own contribution.

Contributions may be completed online or mailed. Electronic contributions must be completed by 10:59 p.m., CT, on December 31. Contributions sent through the mail must be postmarked no later than December 31.

“Be sure to remember to report your NEST and Enable account contributions on your Nebraska state income tax return,” said Stenberg, who is Trustee for both savings programs.

Launched in 2016, the Enable Savings Plan provides tax-free savings accounts to individuals with disabilities, allowing them to save without affecting their public benefits like Medicaid and Supplemental Security Income (SSI). It was one of the first national ABLE (Achieving a Better Life Experience) savings plans offered.

Stenberg said a contribution to a NEST 529 or an Enable account is a thoughtful and long-lasting gift that is easy to deliver. Information about making a gift to a relative or loved one’s Enable account is available online at  https://www.enablesavings.com/home/basics/gift.html. Information about making a gift to a NEST 529 account is available at https://www.nest529direct.com/home/grow/friends--family-gifting.html. Both savings programs are managed by First National Bank of Omaha.

Stenberg offered the following advice about end-of-the-year contributions:

  • Grandparents may take advantage of the Nebraska income tax deduction by opening and contributing to their own NEST 529 accounts for their grandchildren. However, they cannot claim a deduction for contributions to a grandchild’s account owned by the child’s parents.
  • For tax purposes, NEST 529 contributions are considered completed gifts to the account beneficiary. Contributions qualify for the annual gift-tax exclusion, which is $15,000 per person or $30,000 if filing jointly in 2018. This gives account owners the ability to make significant contributions to their college savings without triggering a gift tax.
  • Current NEST 529 account owners may want to consider increasing their contributions to their existing 529 college savings accounts through the NEST Automatic Investment Plan (AIP). An account owner can systematically contribute to a NEST account directly from a personal checking or bank savings account. Learn more at https://www.nest529direct.com/home/grow/your-contributions.html.
  • While the federal tax law passed by the U.S. Congress in 2017 allows for the use of state-sponsored 529 savings accounts for K-12 tuition at private and parochial schools, Nebraska statutes restrict the use of NEST 529 college savings plan accounts for qualified higher education expenses at four-year colleges and universities, community colleges, technical schools, or graduate programs. Under existing state law, the use of 529 accounts for K-12 tuition and rollovers to another state’s ABLE plan are subject to state income tax recapture to the extent previously deducted by the account owner. Rollovers from NEST 529 accounts into Enable are permitted up to the annual contribution limit for Enable, with no income tax recapture.

About NEST 529

NEST 529 is a tax-advantaged 529 college savings plan and provides four plans to help make saving for college simple and affordable: 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. The Nebraska State Treasurer serves as Program Trustee. First National Bank of Omaha serves as Program Manager, and all investments are approved by the Nebraska Investment Council. Families nationwide are saving for college using Nebraska’s 529 College Savings Plans, which have more than 261,000 accounts, including over 84,000 in Nebraska. Visit NEST529.com and treasurer.nebraska.gov for more information.

About Enable

Enable is a tax-advantaged savings plan to help make saving simple and affordable for individuals with disabilities. The Nebraska State Treasurer serves as Program Trustee. First National Bank of Omaha serves as Program Manager, and investments are approved by the Nebraska Investment Council. Visit EnableSavings.com and treasurer.nebraska.gov for more information.

About First National Bank of Omaha

First National Bank of Omaha is a subsidiary of First National of Nebraska. First National of Nebraska and its affiliates have more than $21 billion in assets and 5,000 employee associates. Primary banking offices are located in Nebraska, Colorado, Illinois, Iowa, Kansas, South Dakota and Texas.

  • Jana Langemach
  • Director of Communications
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