Plan Details & Information

The Minnesota College Savings Plan was created by the State of Minnesota as a tax-advantaged way to help people save for the cost of higher education.

To contact the plan:

Plan Management

The Minnesota College Savings Plan is administrated by the State of Minnesota, acting by and through the Minnesota College Savings Plan Board.

The Direct Plan Manager is TIAA-CREF Tuition Financing Incorporated, or TFI. TFI is a wholly owned subsidiary of Teachers Insurance and Annuity Association of America (“TIAA”). TIAA, together with its companion organization, the College Retirement Equities Fund (“CREF”), forms one of America’s leading financial services organizations and one of the world’s largest pension systems, based on assets under management.

A financial services company with more than 100 years’ experience, TIAA specializes in helping clients like you reach your financial goals — for retirement, saving for college, or providing protection for your loved ones. It’s how we meet our commitment to helping you make financial well-being possible.

TFI and the Minnesota College Savings Plan Board entered into an agreement under which TFI provides certain services, including investment recommendations, recordkeeping, reporting and marketing.

If you’re a U.S. citizen or resident alien with a valid Social Security Number or Taxpayer ID Number, and you’re least 18 years of age, you’re eligible to open an account. Individuals opening an account may also designate a person to be the Successor Account Owner in the event of their death.

Additionally, certain types of entities with a valid Taxpayer ID Number such as a trust, an estate, or a corporation may also open an account*.

*Additional restrictions may apply, please refer to the Plan Description for details

The beneficiary is the future student. The beneficiary can be anyone with a valid Social Security Number or Taxpayer ID Number. Typically this would be your child, your grandchild, or yourself. You do not need to be related to the beneficiary, but there may only be one beneficiary per account. The only exceptions to this are entities establishing this as a general scholarship account.

Minimum Contributions & Maximum Account Balance

You can open an account with as little as $25 dollars per investment option, or $15 dollars per pay period through payroll direct deposit.

Your maximum account balance per beneficiary for the Minnesota College Savings Plan is $425,000. Any contribution beyond this amount would be returned to you. In the event your account reaches this amount, it may continue to accrue earnings/interest, though further contributions would be returned and not applied.

How to Make Contributions

One of the best aspects of the Minnesota College Savings Plan is that it’s easy to make contributions. There are many ways to add to the fund including:

• Electronic funds transfer
• Recurring automatic fund transfer from a checking or savings account Automatic payroll direct deposit
• Automatic payroll deduction
• Rollover from another state’s 529 plan*
• Proceeds from a Coverdell Education Savings Account*
• Personal check, bank draft, cashier or teller’s check mailed to:

	Standard Delivery		Overnight Delivery Only
	Minnesota College Savings Plan PO Box 219455 Kansas City, MO 64121-9455		Minnesota College Savings Plan 1001 E 101st Terrace, Suite 200 Kansas City, MO 64131
	The Minnesota College Savings Plan cannot accept cash contributions, starter checks, traveler’s checks, credit cards, convenience checks and some other forms of payment.

STANDARD DELIVERY
Minnesota College Savings Plan PO Box 219455 Kansas City, MO 64121-9455
OVERNIGHT DELIVERY ONLY
Minnesota College Savings Plan 1001 E 101st Terrace, Suite 200 Kansas City, MO 64131
The Minnesota College Savings Plan cannot accept cash contributions, starter checks, traveler’s checks, credit cards, convenience checks and some other forms of payment.

*Be sure to consult with a qualified advisor regarding the possible legal and tax consequences associated with such changes.

Only the account owner may make a withdrawal. You can request a withdrawal from the plan’s website, by mail or by phone. Withdrawals may be made as-needed or systematically. You can pay the institution, send it directly to the beneficiary, or reimburse yourself. Be sure to keep all receipts to substantiate qualification.

Type of Withdrawals:

• Qualified Withdrawals
  These are untaxed and include any withdrawals that will be used to cover Qualified Higher Education Expenses for the student at an Eligible Educational Institution. The student must be enrolled for at least half-time for room and board expenses.
   
  Qualified Higher Education Expenses also include tuition in connection with enrollment or attendance at a K-12 public, private or religious school, up to a maximum of $10,000 per year per Beneficiary from all Section 529 plans; expenses for fees, books, supplies, and equipment required for the participation of a designated beneficiary in an apprenticeship program registered and certified with the Secretary of Labor under the National Apprenticeship Act; and up to $10,000 repaid (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.
• Taxable Withdrawals
  The earnings portion of this type of withdrawal is subject to federal and state tax but does not include the additional federal 10% tax. Say your child receives a full or partial scholarship or attends a military academy, you can withdraw certain amounts from your 529 account that will not be used for qualified higher education expenses and those amounts will be subject to tax on the earnings portion of the withdrawal, but will not be subject to the additional federal 10% tax.
• Non-Qualified Withdrawals
  The earnings portion of this type of withdrawal will be subject to tax, including the additional 10% federal tax. Examples might include using the money for a car, vacation or home improvement. But even if you urgently need to pay a medical bill and withdraw money from your 529 plan as a last resort — that withdrawal would still be subject to tax, including the additional 10% federal tax.

In the event of a refund of amounts paid for qualified higher education expenses from an eligible educational institution, the refund may be redeposited to the 529 plan within 60 days without the amount being subject to tax. The recontributed amount cannot exceed the amount of the refund.

Qualified Education Expenses may include tuition, certain room and board expenses in addition to any fees, books, supplies and equipment required for enrollment and attendance at an eligible educational institution, which includes most post-secondary institutions. Computers and related technology such as internet access fees, software or printers used primarily by the designated beneficiary when enrolled at an eligible educational institution are also qualified education expenses.

If the beneficiary is a special needs student, any additional costs required for enrollment or attendance to meet those needs will also be treated as a qualified higher education expense.

Qualified Higher Education Expenses also include tuition in connection with enrollment or attendance at a K-12 public, private or religious school, up to a maximum of $10,000 per year per Beneficiary from all Section 529 plans; expenses for fees, books, supplies, and equipment required for the participation of a designated beneficiary in an apprenticeship program registered and certified with the Secretary of Labor under the National Apprenticeship Act; and up to $10,000 repaid (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.

About Room and Board Expenses

Room & board costs are considered qualified only during the academic period in which the student is enrolled or accepted for enrollment in a program that leads to a recognized educational credential from an eligible educational institution. This amount cannot exceed the institution’s cost of attendance allowance.

Funds can be used at most accredited colleges and universities in the United States — even certain colleges abroad. In addition, up to $10,000 annually per student, in aggregate from all 529 plans, can be withdrawn free from federal tax if used toward K-12 school tuition. Please see the state tax treatment of withdrawals used towards K-12 school tuition here.

See the Plan Description (PDF) for more information.

Visit Ed.gov to find out if your post-secondary school is accredited.

The Minnesota College Savings Plan provides a variety of professionally managed investment options to choose from including an enrollment year option that automatically shifts from aggressive to conservative investments as your child approaches their expected year of enrollment in school. Alternatively you can tailor your investment options with multi-fund, single-fund and a principal plus interest option to match your risk tolerance, timeline, and investment preferences.

When you pay fewer taxes, you can earn more and grow your account faster — giving your child or grandchild an even bigger head start.

See the difference these tax advantages can make over time in the table below.

This example assumes an initial investment of $5,000, monthly contributions of $100, and a 6% annual rate of return over 18 years. The taxable account assumes a 28% federal and 5% state tax rate. The illustration is for illustrative purposes only and does not represent the performance of any specific portfolio.

Federal Income Tax Benefits

As a 529 Plan, the Minnesota College Savings Plan offers unsurpassed income tax benefits. Although contributions are not deductible on your federal tax return, any investment earnings can grow tax-deferred, and distributions to pay for the beneficiary’s qualified education expenses are free from federal tax.

State Income Tax Information

In addition to federal tax benefits, there are state tax benefits as well. For the Minnesota College Savings Plan, state tax treatment is as follows:

Effective for tax years beginning after December 31, 2016, a taxpayer may be eligible for either a deduction from federal taxable income for Minnesota income tax purposes or a tax credit on contributions to an Account 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 up to $3,000 for joint income tax return filers and $1,500 for all other filers.

A taxpayer who does not claim the deduction from federal taxable income for Minnesota income tax purposes may be eligible for a non-refundable tax credit equal to 50% of the contributions to Accounts, reduced by any withdrawals, made by that taxpayer during the taxable year, with a maximum credit amount of up to $500, subject to phase-out based on certain federal adjusted gross income thresholds. The income thresholds used to determine the maximum credit amount are adjusted annually for inflation.

	MN Adjusted Gross Income (AGI) Limit		Maximum Tax Credit
	All Filers less than $82,940		$500
	Individual Filers between $82,940 and $107,940		$500 reduced by 2% of MN AGI over $82,940
	Joint Filers between $82,940 and $107,940		$500 reduced by 1% of MN AGI over $82,940
	Joint Filers between $107,940 and $149,200		$250
	Joint Filers between $149,200 and $174,290		$250 reduced by 1% of MN AGI over $149,200

Incoming rollovers from another 529 account are not eligible for the tax deduction or credit.

Earnings accrue free of state income tax and any withdrawals used for qualified higher education expenses and outgoing rollovers to other qualified 529 plans are also state income tax free. Withdrawals for tuition expenses at a public, private or religious elementary, middle, or high school are subject to state income tax. All other types of withdrawal are subject to the state income tax. Minnesota tax benefits related to the Minnesota College Savings Plan are available only to Minnesota taxpayers. You should talk to a qualified advisor about how Minnesota tax provisions affect your circumstances.

Estate Tax Planning Benefits

There’s another tax advantage unique to the 529 plan. There’s no federal gift tax on contributions up to $17,000 per year for single filers and $34,000 for married filers. There’s even an option to gift amounts up to $85,000 for single filers and up to $170,000 for married filers if pro-rated over 5 years. This means you could make a one-time gift equivalent to the 5 year amount and it could all qualify for the federal gift tax exclusion. Consult your tax advisor.

It’s a good idea to periodically re-evaluate your investment strategy as your goals, investment horizon, and personal situation change — for example annually at tax time, on a yearly basis if your income changes, or upon the birth of another child.

There are no application fees, no cancellation fees, no change in beneficiary fees — only program management and underlying mutual fund fees.

As with any investment, there are risks. To help you manage these risks there are flexible investment options ranging from conservative to aggressive. Assets in an account are not guaranteed or insured. The value of your account may decrease and you could lose money, including amounts contributed.

For more information about the risks involved in investing in a particular investment option, and whether or not an option is appropriate for you, read the Plan Description (PDF).

It’s possible you might want or need to make changes to your account. Here's a quick summary of the types of changes you can make and what happens when you do:

Changing the Beneficiary

After you open an account you can change the beneficiary on your MNSAVES 529 account to an eligible family member of the former beneficiary without adverse federal tax consequence. “Family member” includes not just immediate family but grandparents, aunts and uncles, step children, in laws...even first cousins. Otherwise, changes may be subject to federal income tax as well as other state and federal tax consequences. See the Plan Description (PDF) for more information.

Changing Investment Strategy

Anytime you make a new contribution, you may select a different investment for that amount. However, you may only change the previously contributed amount twice per year or when you change a beneficiary, and only then if it’s a member of the previous beneficiary’s family. If you have more than one account for the same beneficiary, this restriction applies to all accounts, so you’ll need to make all changes on the same calendar day. You make these changes by submitting the proper asset allocation instructions.

Adding or Changing a Successor Account Owner

You can add or change a successor account owner at any time by completing the appropriate form.*

Transferring Account Ownership

You may also transfer the ownership of your account to another individual or entity that is eligible to be an account owner. This is not the same as changing a successor account owner. This would be when you want to irrevocably sign away all rights, title and interest in the account.*

*Be sure to consult with a qualified advisor regarding the possible legal and tax consequences associated with such changes.