Governor Pete Ricketts is calling attention to the importance of saving for a loved one’s future education by issuing a proclamation declaring September as College Savings Month. With this proclamation, parents and guardians are reminded of the importance of saving, even in times of economic uncertainty.
“As parents, we want to provide our children with every opportunity to achieve their dreams,” said Gov. Ricketts. “By contributing to a NEST 529 College Savings Plan, families can invest in a child’s postsecondary education and benefit from the plan’s tax advantages. I’m declaring September as College Savings Month in Nebraska to highlight the importance of saving for our kids’ futures.”
Many higher education costs, like books, laptops, and institution fees need to be considered along with tuition and room and board. Scholarships and grants can help cover some of those expenses, but with costs rising above the rate of inflation on average, more funds may be needed. According to the non-profit, College Board, in 2021-22, the average costs1 of higher education tuition and fees for a full-time student are as follows:
A NEST 529 Plan is a tax-advantaged account for higher education expenses. NEST 529 College Savings Plans can be used for everything from four-year universities to two-year technical schools. Opening a NEST 529 account doesn’t require a minimum deposit to get started, and contributions can be managed online. Account Owners in Nebraska may be eligible for an annual state income tax deduction of up to $10,000 for NEST 529 contributions or $5,000 if married filing separately.2 Plus, any earnings grow tax-free, and qualified withdrawals may be free from federal and state income tax.3
“By declaring September as College Savings Month, we hope that parents and guardians will take this opportunity to sit down with their loved ones to discuss how a 529 college savings plan can help them reach their education goals,” said Nebraska State Treasurer John Murante.
Parents and Guardians may not know what their child’s future has in store, but a little planning today goes a long way toward their success. Plans allow families to start investing in their child’s future so they can soar toward their goals. Visit NEST529.com to read more about the benefits of a NEST 529 College Savings Plan.
The Nebraska State Treasurer serves as the Program Trustee. All investments, including the portfolio structure offered through the NEST 529 program, are vetted and approved by the Nebraska Investment Council.
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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, NEST Advisor College Savings Plan, Bloomwell 529 Education Savings Plan, and State Farm 529 Savings Plan. The Nebraska State Treasurer serves as Program Trustee. Union Bank and Trust 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 close to 300,000 accounts. Visit NEST529.com and treasurer.nebraska.gov for more information.
About Union Bank and Trust
Founded in 1917 with over 50 years of family ownership, Union Bank and Trust offers complete banking, lending, investment, and trust services. The bank has 38 full-service and loan production offices in Nebraska and Kansas. It is the third largest privately owned bank in Nebraska, with bank assets of $6.6 billion and trust assets of $46.9 billion as of December 31, 2021. Voters have chosen Union Bank and Trust as Best Bank, Best Customer Service, Best Work Environment, and Best Financial Planner in Lincoln for eleven years running.
Important Legal Information
An investor should consider the investment objectives, risks, and charges and expenses associated with municipal fund securities before investing. This and other important information is contained in the fund prospectuses and the NEST Direct College Savings Plan Program Disclosure Statement (issuer’s official statement), which should be read carefully before investing. You can lose money by investing in an Investment Option. Each of the Investment Options involves investment risks, which are described in the Program Disclosure Statement. An investor should consider, before investing, whether the investor’s or beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state’s 529 plan. Investors should consult their tax advisor, attorney, and/or other advisor regarding their specific legal, investment, or tax situation.
1 Source: The College Board "Trends in College Pricing" (October 2021). Average Published Tuition and Fees in 2021 Dollars by Sector (1991-92 to 2021-22)
2 Account owners may deduct for Nebraska income tax purposes contributions they make to their own account (and any other accounts they own in the Nebraska Educational Savings Plan Trust) up to an overall maximum of $10,000 ($5,000 if married, filing separately). Contributions in excess of $10,000 cannot be carried over to a future year. For a minor-owned or UGMA/UTMA 529 account, the minor is considered the account owner for Nebraska state income tax deduction purposes. The minor must file a Nebraska tax return for the year their contributions are made to be eligible for a tax deduction for their own contributions. In the case of a UGMA/UTMA 529 account, contributions by the parent/guardian listed as the Custodian on the UGMA/UTMA Plan account are also eligible for a Nebraska state tax deduction.
3 Withdrawals used to pay for qualified higher education expenses are free from federal and Nebraska state income tax. Qualified higher education expenses include tuition, fees, books, supplies, and equipment required for enrollment or attendance; certain room and board expenses incurred by students who are enrolled at least half-time; the purchase of computer or peripheral equipment, computer software, or Internet access and related services, if used primarily by the beneficiary during any of the years the beneficiary is enrolled at an eligible educational institution; certain expenses for special needs services needed by a special needs beneficiary; apprenticeship program expenses; and payment of principal or interest on any qualified education loan of the Beneficiary or a sibling of the Beneficiary (up to an aggregate lifetime limit of $10,000 per individual). However, earnings on all other types of withdrawals are generally subject to federal and Nebraska state income taxes, and an additional 10% federal tax.
Nebraska law does not treat the following Federal Qualified Higher Education Expenses as Nebraska Qualified Expenses: K–12 Tuition Expenses. If a withdrawal is made for such purposes, although it is a Federal Qualified Withdrawal, it will be treated as a Nebraska Non-Qualified Withdrawal and may result in the recapture of a previously claimed Nebraska state income tax deduction, and the earnings portion will be subject to Nebraska state income tax. Please consult your tax professional about your particular situation.
