The State Farm® College Savings Plan


Eligibility requirements

A qualified tuition plan operated according to section 529 of the Internal Revenue Code, The State Farm College Savings Plan sponsored by the State of Nebraska helps make college investing simple, affordable and convenient. Select from a full range of investment options or learn more about opening an account. It is important to note that there is market risk involved when investing in mutual funds, including possible loss of principal.

  • The plan is open to any individual (including a custodian under a State's Uniform Gifts or Transfers to Minors Act) who has a valid Social Security number.
  • There are no state residency requirements or income restrictions.


Contribution limits

You may make additional contributions at any time, provided that

  • The total amount of all contributions to all accounts maintained within the Nebraska Educational Savings Plan Trust for the same beneficiary may not exceed $300,000, and1
  • No additional contributions may be made for the benefit of a particular beneficiary when the fair market value of all accounts maintained within the Nebraska Educational Savings Plan Trust for that beneficiary plus any current contribution exceed $300,000.1
  • Individual contributions of up to $60,000 ($120,000 for married couples) per beneficiary are allowed in a single year with no federal gift tax.2


Federal income tax benefits

  • Your contributions to the plan are generally removed from your federal taxable estate, reducing its taxable value.
  • You may make contributions of up to $60,000 per beneficiary in a single year without triggering a federal gift tax. Married couples may contribute $120,000 per beneficiary in a single year.3
  • You make after-tax contributions to the account, but you don't pay taxes as the account grows. And as long as withdrawals are used to pay for qualified higher education expenses such as tuition, books, supplies, fees, and certain room and board, your investment earnings are received free of federal income tax.

The availability of such tax or other benefits may be conditioned on meeting certain requirements. Pursuant to the Economic Growth and Tax Relief Reconciliation Act of 2001, Earnings must be used to pay for qualified higher education expenses to be federally tax free. The earnings portion of a nonqualified withdrawal will be subject to ordinary income tax at the recipient’s marginal rate and subject to a 10% penalty.


Qualified withdrawals

Shares in your account may be redeemed to pay the beneficiary's tuition and fees and the cost of books, supplies and equipment required for enrollment or attendance at an institution of higher education. Subject to certain limits, room and board expenses of a student enrolled on at least a half-time basis may also be paid.


School Choice

The beneficiary may attend any school qualified to participate in federal student aid programs administered by the U.S. Department of Education. This includes most post-secondary educational institutions and many vocational schools, both public and private. A list of these institutions may be located on the Department of Education Internet web site.

1 This limit is set by the Nebraska State Treasurer and is subject to change. Accounts in excess of this limit can continue to grow through investment earnings realized by the plan, but no additional contributions can be accepted by the plan when the value of all accounts in the Nebraska Educational Savings Plan Trust for the beneficiary plus any intended contribution is in excess of the limit.

2 A $60,000 gift is viewed as an accelerated gift over five years. Any other gifts to the same beneficiary by the contributor within five years may result in a federal gift-tax liability. If the contributor dies within the five-year period, a prorated portion of the contribution may be included in his or her taxable estate for federal estate tax purposes.

3 The information presented in this document does not constitute tax advice. State and local tax laws vary. Additionally, your home state may only offer favorable tax treatment for investing in a plan that your state offers. Please consult your tax advisor for specific information about your tax situation, including any state tax consequences of an investment.

The State Farm College Savings Plan is available by registered representatives of State Farm VP Management Corp., One State Farm Plaza, Bloomington, IL 61710, 1-800-447-4930. Please read carefully the Enrollment Handbook and Participation Agreement and consider the investment objectives, risks, fees and expenses and other information associated with The State Farm College Savings Plan before investing or sending money. State and local tax laws vary. If you or the designated beneficiary are not Nebraska residents, you should consider before investing whether you or the designated beneficiary's home state offers any state tax or other benefits to its residents for investing in the plan offered by the state.

The State Farm College Savings Plan (the plan) is sponsored by the State of Nebraska and administered by the Nebraska State Treasurer. The plan is established in cooperation with State Farm VP Management Corp. ("State Farm"), Invesco Aim Distributors, Inc. and the State of Nebraska, pursuant to which State Farm offers classes of shares in a series of accounts within the Nebraska Educational Savings Plan Trust (the "Trust" and plan issuer) that are managed and distributed by Invesco Aim Capital Management, Inc. ("Invesco AIM") and its affiliates. The Trust offers other accounts that are not affiliated with the plan.

The Nebraska State Treasurer serves as trustee of the plan; Invesco Aim Capital Management, Inc. serves as the investment manager, with the oversight of the Nebraska Investment Council; Invesco Aim Distributors, Inc. serves as the distributor; and Invesco Aim Investment Services, Inc. serves as the servicing agent, Union Bank & Trust Company serves as the program manager.

State Farm does not provide investment management services for the plan and the accounts in the plan are not insured or guaranteed by State Farm, Invesco Aim, Union Bank and Trust Company, the Trust, the State of Nebraska, the Nebraska State Treasurer, the Nebraska Investment Council, any of their respective affiliates, directors, officers or agents, or any other entity.

Invesco AimSM is a service mark of Invesco Aim Management Group, Inc. Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc., Invesco Aim Private Asset Management, Inc. and Invesco PowerShares Capital Management LLC are the investment advisors for the products and services represented by Invesco Aim; they each provide investment advisory services to individual and institutional clients and do not sell securities. Invesco Aim Distributors, Inc. is the distributor for the retail mutual funds, exchange-traded funds and U.S. institutional money market funds represented by Invesco Aim. All entities are indirect, wholly owned subsidiaries of Invesco Ltd.

State Farm and Invesco Aim are not affiliates. Invesco Aim Distributors Inc. is the distributor of the plan.

State Farm VP Management Corp Risk/Important Disclosures. State Farm Mutual Funds Prospectus. The State Farm College Savings Plan Enrollment Handbook (PDF 417 KB) .

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