NU Online News Service, May 29, 2003, 4:42 p.m. EDT – State Farm VP Management Corp., a unit of State Farm Mutual Automobile Insurance Company, Bloomington, Ill., has agreed to sell the Nebraska 529 college savings plan to consumers in all 50 states.
State Farm will be marketing the plan, which is based on the Nebraska Educational Savings Plan Trust, as the State Farm College Savings Plan.
AIM Capital Management Inc., Houston, manages the plan investment funds.
The plan offers buyers a choice of 10 model investment portfolios.
Residents of states other than Nebraska can defer federal income taxes on contributions made to the plan, and beneficiaries can withdraw cash for qualified educational expenses without paying federal income taxes on the proceeds.
Nebraska residents may be able to defer state income taxes on plan contributions.
But State Farm notes that one drawback for investors with long-term outlooks is that the federal law that authorizes the 529 plan federal income tax break is part of the Economic Growth and Tax Relief Reconciliation Act of 2001. The 529 tax break provision will expire in 2010 unless Congress takes steps to save it.