Tax exemptions increase for college savings plans

Lawmakers passed a bill May 29 that provides higher tax deductions to persons making contributions to a Nebraska College Savings Program (NCSP) account.

Currently, contributions to a NCSP account are exempt from state income tax up to $2,500 for a married person filing separately and $5,000 for a married couple filing jointly.

Under LB296, introduced by Kearney Sen. Galen Hadley, the amount of contributions exempt from income taxes will increase to $5,000 for a married person filing separately and $10,000 for a married couple filing jointly.

An adult making contributions to an account established under either the Uniform Transfers to Minors Act or the Uniform Gifts to Minors Act — as well as rollover contributions from another state’s savings program — will be exempt under the bill.

The bill also establishes transfer of ownership procedures. In the case of the account owner’s death and there is no successor named, ownership of the account will transfer to the beneficiary.

The bill passed on a 48-0 vote.