List of 529 eligible expenses11/28/2023 The Plan offers a series of Investment Options within the Nebraska Educational Savings Plan Trust (the “Trust”), which offers other Investment Options not affiliated with the Plan. Union Bank and Trust serves as Program Manager for the Plan. The NEST Direct College Savings Plan (the “Plan”) is sponsored by the State of Nebraska, administered by the Nebraska State Treasurer, and the Nebraska Investment Council provides investment oversight. Investors should consult their tax advisor, attorney, and/or other advisor regarding their specific legal, investment, or tax situation. An investor should consider, before investing, whether the investor’s or 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 529 plan. Each of the Investment Options involves investment risks, which are described in the Program Disclosure Statement. You can lose money by investing in an Investment Option. This and other important information is contained in the fund prospectuses and the NEST Direct College Savings Plan Program Disclosure Statement (issuer’s official statement), which should be read carefully before investing. IRS: Education Credits – American Opportunity Tax Credit and Lifetime Learning CreditĪn investor should consider the investment objectives, risks, and charges and expenses associated with municipal fund securities before investing. This can occur when a student drops a class mid-semester. If a student receives a refund of qualified education expenses that were treated as paid by a 529 distribution, the student can recontribute these amounts into any 529 for which they are the beneficiary within 60 days after the date of the refund to avoid the need to figure the taxable part of the 529 distribution. Coordination with Tuition and Fees DeductionĪ tuition and fees deduction can be claimed in the same year the beneficiary takes a tax-free distribution from a qualified tuition program as long as the same expenses aren’t used for both benefits. If a beneficiary receives distributions from both a qualified tuition program and a Coverdell Education Savings Account in the same year, and the total of these distributions are more than the beneficiary’s adjusted qualified higher education expenses, the expenses must be allocated between the distributions. Coordination with Coverdell Education Savings Account Distributions Coordination with American Opportunity and Lifetime Learning CreditsĪn American Opportunity or Lifetime Learning Credit can be claimed in the same year the beneficiary takes a tax-free distribution from a qualified tuition program, if the same expenses aren’t used for both benefits. You should consult with a qualified tax advisor with respect to the various education benefits. The tax benefits afforded to 529 plans must be coordinated with other programs designed to provide tax benefits for meeting higher education expenses in order to avoid the duplication of benefits. However, if a Federal Qualified Withdrawal is also a Nebraska Non-Qualified Withdrawal, the withdrawal may be subject to recapture of Nebraska state income tax deductions previously taken, and the earnings portion of the withdrawal may be included in your gross income for Nebraska state income tax purposes.
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