Mutual Funds
The Higher College Costs Go, the Better These Tax Advantages Look

The State Farm College Savings Plan

Sponsored by the State of Nebraska

The State Farm College Savings Plan offers valuable tax benefits. As a qualified tuition plan operated according to section 529 of the Internal Revenue Code, the earnings and withdrawals may be free from federal and possibly state income taxes.

Invest your after-tax contributions as you choose from a variety of portfolios, including five enrollment-based and four static portfolios managed by OFI Private Investments Inc. (OFIPI), a subsidiary of OppenheimerFunds, Inc. This enables you to tailor the plan that's right for your family, and if your investment objectives change, you can transfer to another portfolio (two investment changes per year are allowed).

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Fast Fact

There are no state residency requirements or income restrictions for a 529 plan. So while the State Farm College Savings Plan is sponsored by the State of Nebraska, you can invest in it no matter what state you live in, and can send your student to any eligible college in the United States.

To review the other education savings plans we offer, check out the comparison chart on our Education Savings Plans page.

Our four static portfolios give you more control over how your 529 College Savings Plan funds are invested. That's because unlike investing in our enrollment-based portfolios, you choose the static portfolio, or portfolios, you'd like to invest in. And since our static portfolios don't automatically invest more conservatively over time, you can change your portfolio selections as your needs change (two investment changes per year are allowed).

Growth Portfolio. All assets within this portfolio are invested in equity funds. It is most appropriate for investors with a long investment time horizon and a high risk tolerance. Learn more about Growth portfolio performance, prices, etc.

Moderate Growth Portfolio. This portfolio provides a mix of equity and fixed-income investments. It is most appropriate for investors with a medium-to-long investment time horizon and moderate risk tolerance. Learn more about Moderate Growth portfolio performance, prices, etc.

Balanced Portfolio. This portfolio provides a more conservative mix of equity and fixed-income investments. Investors with a short-to-medium investment time horizon and a lower risk tolerance may prefer this option. Learn more about Balance portfolio performance, prices, etc.

Money Market Portfolio. This portfolio seeks current income and protection of principal. It may be appropriate for investors with a short investment time horizon and a low risk tolerance. Learn more about Money Market portfolio performance, prices, etc.

Eligibility Requirements

The State Farm College Savings 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 for our 529 plan.

Contribution Limits

You may make additional contributions to your 529 plan at any time, provided that all contributions to all accounts maintained within the Nebraska Educational Savings Plan Trust for the same beneficiary do not exceed $360,000.

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 $360,000.

You may make contributions of up to $14,000 ($28,000 for married couples) per beneficiary in a single year without triggering a federal gift tax. You may also contribute up to $70,000 ($140,000 for married couples) in one year. A $70,000 ($140,000 for married couples) gift is viewed as an accelerated gift over 5 years. Any other gifts to the same beneficiary by the contributor within 5 years may result in a federal gift tax liability. If the contributor dies within the 5-year period, a prorated portion of the contribution may be included in his or her taxable estate.

Federal Income Tax Benefits

  • Your contributions to the 529 plan are generally removed from your federal taxable estate, reducing its taxable value.
  • You may make contributions of up to $70,000 per beneficiary in a single year without triggering a federal gift tax. Married couples may contribute $140,000 per beneficiary in a single year.
  • You make after-tax contributions to the 529 plan, 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, computers and related equipment, and certain room and board, your investment earnings are received free of federal income tax.

The availability of such tax or other benefits may depend 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 non-qualified 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 State Farm College Savings Plan may be redeemed to pay the beneficiary's tuition and fees and the cost of books, supplies, and computers and related equipment 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.

Risk Disclosures

Investing involves risk, including potential for loss.

An investment in the Money Market Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.

AP2016/06/0773

Not FDIC Insured

  • No Bank Guarantee
  • May Lose Value