EDUCATION SAVINGS PLANS
A Less Taxing Way to Save for College

State Farm® 529 Savings Plan

Kids grow so fast. It’s hard to imagine now, but your child’s college years will be here in no time. That’s why you should give yourself a head start and start now. Begin thinking about your education savings goals and how the State Farm 529 Savings Plan can help you achieve them.

Named after Section 529 of the Internal Revenue Code, a 529 savings plan, provides investors a way to save tax-freefootnote[1] for higher education. The funds can be used at eligible community colleges, trade and vocational schools, universities and graduate schools all across the U.S., and even some abroad.footnote[2] You can invest for your child, grandchild, niece or nephew or your spouse – even use the funds in your State Farm 529 Savings Plan account for yourself.

With the help of your State Farm registered agent, you can develop a realistic college savings plan based on your risk tolerance, time frame, and personal family and financial situation.

Open an Account today by contacting a State Farm registered agent!

Investment Options

Your after-tax contributions will be invested as you choose from a variety of investment options. Things to consider when making your selections include your timeline (or when you'll need to withdraw your money) and your comfort with risk. Learn more about our 529 Savings Plan Investment Options.

Federal Tax Benefits

Contributions are made with after-tax dollars, and earnings grow federally tax-deferred while invested and federally tax-free if withdrawn for qualified expensesfootnote[1] such as tuition and fees, required books, supplies, computers and related equipment, and qualified expenses for room and board. Assets in a tax-deferred account may grow more quickly than assets in taxable accounts.

State Tax Benefits*

States may offer state tax or other tax benefits for contributions into the State Farm 529 Plan, sponsored by the state of Nebraska, or any other 529 plan sponsored by another state. The State Farm 529 Plan may be appropriate for those individuals with taxable income in 1) states that offer state income tax deductions, regardless of the state 529 plan into which contributions are made (tax-parity states), or 2) in states that do not have state income taxes (tax-neutral states). Keep in mind, state tax benefits are only one factor in determining if a 529 plan is suitable.

*Investors should consider before investing whether their or their 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 qualified tuition program and should consult their tax advisor, attorney and/or other advisor regarding their specific legal, investment or tax situation.

Estate Tax Benefits

Contributions are considered completed gifts and are eligible for the gift tax annual exclusion of up to $15,000 ($30,000 for married couples) per beneficiary from your federal taxable estate or up to $75,000 ($150,000 filing jointly) per beneficiary in a single year, without incurring federal gift tax as long as there is no additional gift to the beneficiary for five years.footnote[3]

return to reference[1] If assets are not used for qualified expenses, the earnings portion of the withdrawal is subject to federal income tax and may be subject to an additional 10% penalty, as well as, local and state taxes.

return to reference[2] An eligible educational institution includes accredited post-secondary educational institutions or vocational schools in the United States and some abroad offering credit toward a bachelor’s degree, an associate’s degree, a graduate level or professional degree, or another recognized post-secondary credential.

return to reference[3] If the account owner dies before the end of the five-year period, a prorated portion of the contribution will be included in his or her taxable estate. If you contribute less than the $75,000 maximum, additional contributions can be made without incurring federal gift taxes, up to a prorated level of $15,000 per year. Federal gift taxation may result if a contribution exceeds the available annual gift tax exclusion amount remaining for a beneficiary in the year of the contribution.

return to reference[4] A “family member” includes an individual who is a son, daughter, stepson, stepdaughter or a descendant of any such person, a brother, sister, stepbrother or stepsister, a son or daughter of a brother or sister, a brother or sister of the mother, a son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law or sister-in-law, the spouse of the beneficiary or the spouse of any individual described above, or a first cousin of the beneficiary. For purposes of determining who is a “member of the family,” a legally adopted child or a foster child of an individual is treated as the child of that individual by blood. The terms “brother” and “sister” include half-brothers and half-sisters.

return to reference[5] No additional contributions can be made for any beneficiary when the fair market value of all accounts maintained for that beneficiary within all plans offered by the State of Nebraska reaches $400,000. Assets can grow beyond $400,000.

Risk Disclosures

The State Farm 529 Savings Plan (the "Plan"), is sponsored by the State of Nebraska and administered by the Nebraska State Treasurer. The State Farm 529 Savings Plan offers a series of investment options portfolios within the Nebraska Educational Savings Plan Trust (which) offers other investment portfolios not affiliated with the State Farm 529 Savings Plan. The State Farm 529 Savings Plan is intended to operate as a qualified tuition program to be used only to save for qualified higher education expenses, pursuant to Section 529 of the U.S. Internal Revenue Code.

An investor should consider the Plan’s investment objectives, risks, charges and expenses before investing. The Program Disclosure Statement at statefarm.com® which contains more information, should be read carefully before investing.

Investors should consider before investing whether their or their 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 qualified tuition program and should consult their tax advisor, attorney and/or other advisor regarding their specific legal, investment or tax situation.

Investing involves risk, including potential for loss.

AP2018/07/0883

Not FDIC Insured

  • No Bank Guarantee
  • May Lose Value