The College Savings Plan of Nebraska is a great way to help meet your family's college savings needs for several reasons. It's affordable-there is no minimum annual contribution required. You can invest as much as $60,000 a year †. And contributions can be made in several ways: lump sum payment, automatic account withdrawal, or payroll deduction. Other stand out features are the investment options with brand name mutual funds and the ability to maintain control of the account.
There are several features of the plan that set it a part from other
ways to save. The chart below illustrates a comparison of other savings
options.
|
Plan
|
College Savings Plan of Nebraska
|
UGMA/UTMA
|
Coverdell Education Savings Accounts
|
Roth IRA
|
Taxable Investment
|
| Are
contributions tax deductible? |
Yes. Account Owners that are Nebraska residents or filers can receive a State income tax deduction of up to $5,000 per return, for contributions to the Plan ($2500 if married filing separately). |
No |
No |
No |
No |
| Is
there a contribution limit per beneficiary? |
Currently
$360,000 |
No |
Currently $2,000 |
Currently $5,000
(or 100% of compensation, if less) |
No |
| How
are distributions for qualified higher education expenses taxed? |
Withdrawals for qualified higher education expenses are federally income tax-free. |
Income
and earnings are taxed each year at the child's rate (special rules
apply for children under the age of 24). |
Withdrawals
for qualified higher education expenses are tax-free. |
Contributions
can be withdrawn tax-free at any time. Account earnings can be withdrawn
for higher education expenses, subject to current income tax, but
exempt from the IRS 10% Penalty Tax. |
Income
and earnings are taxed at the account owners tax rate or current dividend rate. |
| Can
you change the beneficiary of the account? |
Yes.
A transfer to another member of the beneficiary's family is allowed. |
No.
This is an irrevocable gift to the child. |
Yes.
A transfer to another member of the beneficiary's family is allowed. |
N/A
for higher education purposes. |
N/A |
| Are
there any income limits restricting who is eligible to contribute? |
No |
No |
Yes.
Eligibility begins to phase out at $95,000 AGI for single filers and
is completely phased out at $110,000 ($190,000 - $220,000 AGI phase
out range for taxpayers filing jointly).
|
Yes. Eligibility begins to phase out at $101,000 AGI for single filers and $159,000 AGI for married filing jointly |
No |
| How
can funds be used? |
Funds can be used at eligible schools nationwide. Withdrawals for qualified expenses are Tax-Free. Non-qualified withdrawals may be subject to penalties and taxation. |
The
account must be used for the minor's benefit. When the child attains
the appropriate legal age, the child controls the funds. |
Funds can be used at eligible schools nationwide, including K-12 expenses. Withdrawals for qualified expenses receive favorable tax treatment. Non-qualified withdrawals may be subject to penalties and taxation. |
For
any purpose, may be subject to penalties and taxation. |
For
any purpose. |
| How
is the account treated for estate tax purposes? |
The value of the account is removed from the account owner's taxable estate.† |
The
value of the account is included in the custodian's taxable estate. |
Contributions IRA are treated as a completed gift from the contributor
to the beneficiary. |
The
value of the account is included in the account owners taxable estate. |
The
value of the account is included in the account owners taxable estate. |
