Persons making contributions to a Nebraska College Savings Program (NCSP) account would see higher tax deductions under a bill heard by the Revenue Committee Feb. 1.<\/p>\n
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.<\/p>\n
Under LB296, introduced by Kearney Sen. Galen Hadley, the amount of contributions exempt from income taxes would increase to $5,000 for a married person filing separately and $10,000 for a married couple filing jointly.<\/p>\n
Omaha Sen. Burke Harr, one of the bill\u2019s co-sponsors, said it is important to encourage families to take advantage of the deduction and save for their children\u2019s future.<\/p>\n
\u201cWe need to think about the importance of saving for our children\u2019s future as a parental right,\u201d Harr said.<\/p>\n
An adult making contributions to an account established under either the Uniform Transfers to Minors Act or the Uniform Gifts to Minors Act \u2014 as well as rollover contributions from another state\u2019s savings program \u2014 also would be exempt under the bill.<\/p>\n
LB296 also establishes transfer of ownership procedures. In the case of the account owner\u2019s death, ownership automatically would transfer to the owner\u2019s spouse. If the spouse is deceased or otherwise incapacitated, the account\u2019s beneficiary would gain ownership of the account.<\/p>\n
Nebraska State Treasurer Don Stenberg supported the bill, saying that growing the Nebraska program should be a priority for the state.<\/p>\n
\u201cWe are ranked as one of the best college savings programs in the nation,\u201d he said. \u201cThis bill would continue to further the savings plan and encourage more people to invest in the plan.\u201d<\/p>\n
Courtnay VanDeVelde, a policy associate with Voices for Children in Nebraska, also supported the bill. She said research has proven that college savings accounts can be positively correlated with educational success.<\/p>\n
\u201cThe cost of tuition has moved higher education out of reach for many children,\u201d she said. \u201cWe need to encourage more people to take advantage of college savings plans.\u201d<\/p>\n
Susan Spahn, representing the Nebraska State Bar Association, opposed the bill. She said the provision transferring ownership of the account to a spouse upon the death of the account owner could be harmful to the beneficiary.<\/p>\n
\u201cThere are many blended families and the link between a stepparent and stepchild may already be a tenuous one,\u201d Spahn said. \u201cBy naming the spouse \u2014who may not have the child\u2019s best interests in mind \u2014 as the default successor, you\u2019ve given them the right to take money out or change the beneficiary.\u201d<\/p>\n
The committee took no immediate action on the bill.<\/p>\n","protected":false},"excerpt":{"rendered":"
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