About 529 Plans
If the beneficiary of an account does not attend college, the account owner may transfer the account to another eligible family member. See definition of eligible family member. In addition, the funds can be withdrawn for other purposes, and will be treated as an unqualified expense. For more information about potential tax penalties, click here.
Plans vary in a number of ways, including 529 contribution limits to the account (defined by the states), fees to open and maintain an account, in-state tax treatments such as a state tax deduction, investment options offered, and the financial services company that manages the plan. There may also be other differences, such as special programs or benefits defined by the particular plan. Before investing in a 529 plan, you should consider whether the state you or your designated beneficiary reside in or have taxable income, or has a 529 plan that offers favorable state income tax or other benefits that are only available if you invest in that state’s 529 plan.
Check out our interactive comparison tool.
Account Management
To view your transaction history, log in to your account, choose a beneficiary, and scroll down to the transition history section. You can always speak to one of our college savings specialists at 1-877-338-4646, Monday through Friday, 7 a.m. to 8 p.m. CT.
With the Minnesota College Savings Plan, there are no sales charges, start-up or maintenance fees. To review the current total annual asset-based fees, which are comprised of the underlying investment expenses for each Investment Option, the Plan Manager fee, and state administration fee, please see fees and expenses.
No. The money in your account may be used at any eligible educational institution in the United States, and some abroad. This includes public and private colleges and universities, graduate schools, community colleges, and certain proprietary and vocational schools.
In addition, up to $10,000 annually per student, in aggregate from all 529 plans, can be withdrawn free from federal tax if used for tuition expenses at a public, private or religious elementary, middle, or high school.
Please see the state tax treatment of withdrawals used for K-12 school tuition here.
There is no annual limit on the amount you may contribute. However, there is an overall maximum account balance limit of $425,000 which applies to all accounts opened for a beneficiary. Accounts that have reached the maximum account balance limit may continue to accrue earnings.
You can contribute to an account by establishing a recurring contribution, payroll direct deposit, electronic funds transfer, or a rollover from another 529 College Savings Program Account, Coverdell Education Savings Account or qualified U.S. savings bond. For more information, click here.
To update your account information, log in select "Profile & Documents" and select the appropriate option from the left hand navigation.
Yes, a beneficiary may have more than one Minnesota College Savings Plan account. However, an account owner can have only one account for each beneficiary.
For example, a beneficiary may have an account owned by their parent, and/or their grandparent, and/or their aunt, etc. There is an overall maximum account balance limit of $425,000 which applies to all accounts opened for a beneficiary.
Yes, please click here to learn more.
Yes, having an account for each beneficiary is recommended. A Minnesota College Savings Plan only takes $25 dollars and 15 minutes to open.
Yes, you can transfer 529 college funds from another 529 college savings plan to an account in the Minnesota College Savings Plan for the same beneficiary once within a 12-month period without incurring federal income tax. You should consult your tax advisor or the other 529 college savings plan. State and local taxes may apply. How to Manage an Incoming Rollover from another 529 Account.
Yes - funds may be redeposited to your 529 plan within 60 days without penalty should a student need to withdraw from a class. The recontributed amount cannot exceed the amount of the refund.
If there is no financial activity within your account, then statements will not be delivered via mail or email (depending on your delivery preference). However, Q4 statements will be delivered regardless of financial activity. You can log into your account at any time to view quarterly statements.
Investments
Minnesota College Savings Plan performance for the eleven investment options is available online. Please click here for more information.
The Minnesota College Savings Plan offers you a choice of eleven investment options. These options vary in their investment strategy and degree of risk, allowing you to select an option or combination of options that may fit your needs. To see the list of Investment Options, brief descriptions and associated fees and expenses, visit Investment Options. For more information on the risks involved in investing in such Investment Options, and the type of investor for whom each investment option may be appropriate, read the plan description.
You may choose among the Plan's eleven investment options. Click here for more information about investment options.
Yes. Each time you make a contribution you may select any one of the Plan's eleven investment options. Once invested in a particular investment option, contributions and any earnings may be transferred to other investment options only twice per calendar year or upon a transfer of funds to a Plan account for a different eligible beneficiary.
Contributions
No, 529 plan contributions are not deductible for federal income tax purposes.
Program contributions are always made after-tax.
Examples of Taxable Withdrawals are: a beneficiary’s death, permanent disability, receipt of a scholarship award, or attendance at a military academy. A taxable withdrawal will be subject to applicable state and federal income tax on earnings, if any, but will not be subject to the 10% additional federal penalty tax on earnings (the "Additional Tax").
See the Plan Description for additional information.
Online Access
If you have forgotten your Username, please click here.
If you have forgotten your password, please tell us your username and registered email address here.
To change your password, log in here, choose a beneficiary and select "View profile and documents," then "Password & Security Features" from the left hand navigation.
If you have forgotten both your username and password, first retrieve your username by clicking here. Once you have received your username, enter it on the Log In page and click Continue. On the password page click on the Forgot password? link, and follow the instructions to create a new password.
If your account has been locked, please contact client services at 1-877-338-4646 from 7:00 AM to 8:00 PM CT Monday to Friday, excluding holidays. They can assist you with unlocking your account. We apologize for the inconvenience.
To sign up for e-delivery, log in here, and click on Edit Delivery Preferences.
For information, please click here.
Taxes
Yes, a Minnesota taxpayer may be eligible for either a deduction or a tax credit on contributions during a taxable year.
Net contributions by a taxpayer who does not claim the Minnesota tax credit for contributions are deductible for Minnesota income tax purposes each year. Tax deductions up to $3,000 for joint income tax return filers and $1,500 for all other filers.
Incoming rollovers from another 529 account are not eligible for the tax deduction or credit. For more information about tax advantages, please click here.
No, contributions to Minnesota College Savings Plan or any 529 plan are not deductible for federal income tax purposes.
When you contribute to the Minnesota College Savings Plan, any account earnings can grow federal and Minnesota income tax-deferred until withdrawn. Plus, distributions used to pay for qualified higher education expenses will be free from federal and Minnesota income tax.
Contributions to a Minnesota College Savings Plan account may help reduce the taxable value of your estate. For more information about gifting, please click here.
The earnings portion of a non-qualified withdrawal is subject to federal income taxation and the additional 10% federal tax. See the plan description for details.
If you are taking a withdrawal to pay for qualified higher education expenses of the beneficiary, there will be no federal or Minnesota income tax. Find out how to make a withdrawal.
A student or the student’s parent may claim a Hope Scholarship Credit or Lifetime Learning Credit for certain qualified education expenses, provided that eligibility requirements for the credit are met. However, you cannot claim a credit based on the same expenses used to figure the tax-free portion of a distribution (withdrawal) from a 529 plan. You should consult the current version of IRS Publication 970, Tax Benefits for Education, for information about other tax incentives available for educational expenses.
Financial Aid/Scholarships
Money set aside in a 529 plan actually has less of an impact on financial aid than some other savings methods. That is because 529 assets are typically treated as the account holder's (i.e. the parent's) and not the student's. Every school has a formula for how they calculate the "Expected Family Contribution" (EFC). In general, in EFC calculations, parent assets are assessed at approximately 5% whereas student assets are generally assessed at 20%. Meaning only 5% of parent assets are assumed to go towards how much a family should pay for college, yet a full 20% of the child's assets are assumed to go towards college. Bottom line, 529 savings have less of an impact when figuring financial aid, than assets owned by the child (for example a custodial (UGMA/UTMA) account).
For more information, please click here.
If the beneficiary receives a scholarship that covers the cost of qualified expenses, you can withdraw the funds from your account up to the amount of the scholarship without incurring the 10% federal tax penalty on the earnings portion. However, the earnings portion will be subject to federal and state income tax. If the amount withdrawn exceeds the amount of the scholarship, the earnings portion of the amount withdrawn will be subject to the additional 10% federal tax penalty. Please consult with a qualified tax advisor or consultant.
Withdrawals
You may request a withdrawal via your account online. Select the beneficiary you would like to withdraw the money for, click "Make a Withdrawal" on the left hand navigation and follow the directions. Alternatively, you may request a withdrawal by using the Withdrawal Form.
To view your transaction history, log in to your account, choose a beneficiary, and scroll down to the transaction history section. You can always speak to one of our college savings specialists at 1-877-338-4646, Monday through Friday, 7 a.m. to 8 p.m. CT.
Qualified higher education expenses include tuition, certain room and board expenses, fees, and the cost of books, supplies, and equipment required for the enrollment and attendance of the Beneficiary at an eligible educational institution. Computers and related technology such as internet access fees, software or printers are also qualified when used primarily by the beneficiary when enrolled at an eligible educational institution.
For federal income tax purposes, Qualified Higher Education Expenses also includes (i) tuition in connection with enrollment or attendance at a primary or secondary public, private, or religious school, up to a maximum of $10,000 of distributions for such tuition expenses per taxable year per Beneficiary from all Section 529 Programs; (ii) expenses for fees, books, supplies, and equipment required for the participation of a Beneficiary in a certified apprenticeship program; and (iii) amounts paid as principal or interest on any qualified education loan of either the Beneficiary, or a sibling of the Beneficiary up to a lifetime limit of $10,000 per individual.*
*Withdrawals for tuition expenses at a public, private or religious elementary, middle, or high school, registered apprenticeship programs, and student loans can be withdrawn free from federal taxes, however may include recapture of tax deduction/credit, state income tax as well as penalties. You should talk to a qualified advisor about how tax provisions affect your circumstances.
The beneficiary must be enrolled at least half time at an eligible post-secondary institution. For students living in housing owned and operated by the institution, the full invoice amount will be used to determine the qualified room and board expenses. For those students living at home or in off-campus housing, the "cost of attendance" allowance for the individual institution will be used for the qualified room and board expenses.
Computers and related technology such as internet access fees, software or printers are also qualified education expenses. The student must be the primary user of the equipment.
Contact your school to determine if it qualifies as an eligible educational institution or use the Federal School Code Search on the Free Application for Federal Student Aid website.
Federal tax treatment of 529 plan qualified higher education expenses or QHEEs includes the repayment of up to $10,000 (including principal and interest) on any qualified education loan of either a 529 plan designated beneficiary or a sibling of the designated beneficiary. To be a qualified expense, the loan repayment amount for an individual is subject to a lifetime limit of $10,000.*
*Withdrawals for tuition expenses at a public, private or religious elementary, middle, or high school, registered apprenticeship programs, and student loans can be withdrawn free from federal taxes, however may include recapture of tax deduction/credit, state income tax as well as penalties. You should talk to a qualified advisor about how tax provisions affect your circumstances.
A non-qualified withdrawal is any withdrawal that does not meet the requirements of being: (1) a qualified withdrawal; (2) a taxable withdrawal; or (3) a rollover. The earnings portion of a non-qualified withdrawal is subject to federal income taxation, and the additional 10% federal tax. See the Plan Information and Details section for more info.
Taxable withdrawals that are not subject to the 10% penalty are withdrawals due to the beneficiary's death, the permanent disability of the beneficiary, the beneficiary's receipt of a scholarship award or certain other tax-free amounts, or the beneficiary's attendance at a military academy. A taxable withdrawal will be subject to applicable federal income tax on earnings, if any, but will not be subject to the 10% additional federal tax on earnings (the "Additional Tax").
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