Minnesota 529 Plan: What College Savers Should Know
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According to the Federal Reserve, Minnesota held about $1.7 billion in 529 college savings plans in June 2022. These investment accounts help people save for college, either for themselves or for beneficiaries like children or grandchildren.
Anyone can participate in Minnesota's college savings plan, whether they're a state resident or not. If you are a Minnesota resident, you get tax benefits for using a college savings plan. Keep reading to learn more about saving for school in Minnesota.
Minnesota College Savings Plan
Minnesota offers one college savings plan:
Minnesota College Savings Plan (MNSaves)
- Requires State Residency? No
- K-12 Expenses Eligible? No
- Fees: 0-0.28%
- Performance Notes:
- The 2022/2023 Enrollment Option portfolio gained 2.24% in average annual returns in its lifetime.
- The Multi-Fund Aggressive Allocation Option gained 6.38% in average annual returns.
- The Principal Plus Interest Investment Option gained 2.35%. It guarantees an annual rate of return between 1-3%.
Behind the Numbers
Keep in mind, a portfolio's performance is bound to change over time. We last updated our performance notes in January 2023.
Also, the Minnesota College Savings Plan offers many options to invest in — not just the ones we mention. If you're interested in investing, look into the plan's performance yourself to explore which option is right for you.
Minnesota College Savings Plan Rules and Tax Deduction
Per the College Savings Plan Network:
- If you're a Minnesota resident, annual contributions you make to any college savings plan — whether it's in-state or not — are tax deductible.
- Single residents can deduct up to $1,500 on their taxes.
- Married residents who file jointly can deduct up to $3,000.
Residents can contribute up to $425,000 in total to the Minnesota College Savings Plan. But you can't use these funds for K-12 educational expenses without a penalty.