General InformationDownload PDF Report
Minnesota College Savings Plan
Minnesota College Savings Plan is a TIAA-managed 529 savings program features an age-based option and ten fixed options including a guaranteed option.
- Program typeSavings
- State agencyMinnesota Office of Higher Education and the State Board of Investment
- Tax deductionTax deduction for single filers $1,500/yrTax deduction for joint filers $3,000/yr
- Program ManagerTIAA-CREF Tuition Financing, Inc.
- Program distributorTIAA-CREF Individual & Institutional Services, LLC
- Manager contract termUNLOCK PRO
Ratings & Rankings
Our overall rating for non-residents
This is an excellent program with many benefits for the participant and positive investment attributes. If it has any significant weaknesses then it also has some particularly good things to recommend it.
Each plan's performance score is developed directly from Savingforcollege.com's Quarterly 529 Performance Rankings. A 529 savings plan must have at least one year of performance history before they will be assigned a 5-cap rating. For those plans that are not part of our quarterly performance rankings, such as plans offering a single set of bank-based investment options, we assign a performance score by evaluating the returns currently available on similar types of investments outside of 529 plans.
State residency requirements:None
Who can be a participant/owner in the program?U.S. citizens and resident aliens, UGMA/UTMA custodians, and legal entities.
Significant time or age restrictions imposed by the program:None
Maximum contributions:Accepts contributions until all account balances in Minnesota's 529 plan for the same beneficiary reach $425,000.
Minimum contributions:$25 per investment option, or $15 per investment option via payroll deduction.
Age-based investment options:The Managed Allocation Option contains 9 portfolios of underlying mutual funds. Contributions are placed into the portfolio corresponding to the beneficiary's age and later reassigned to more conservative portfolios as the beneficiary approaches college age.View more age-based investment options
Static investment options:Select among 10 options: 7 static blend portfolios, two single fund portfolios, and the Principal Plus Interest Option.View more static investment options
Underlying investments:TIAA-CREF institutional mutual funds; the Principal Plus Interest Option is invested in a funding agreement with TIAA-CREF Life Insurance Company that guarantees principal and a minimum rate of interest (actual rate is declared annually).View a full list of this plan's investment options
Underlying fund allocations:UNLOCK PRO
Portfolio Fees & Performance LookupUNLOCK PRO
Fees & Expenses
Enrollment or application fee:None.
Account maintenance fee:None.
Program management fees:0.14% manager fee plus 0.0025% state fee. Manager fee and state fee do not apply to the Principal Plus Interest Option.
Expenses of the underlying investments:Not applicable, Ranges from 0.07% to 0.17% in the age-based and static portfolios; 0.06 to 0.14% in the individual portfolios.
Total asset-based expense ratio:0.17% to 0.31%. None for the Principal Plus Interest Option. 0.14% for the Money Market Option after fee waiver.
Taxes and other Benefits
- Tax deduction for single filers$1,500/yr
- Tax deduction for joint filers$3,000/yr
Married filing jointly residents contributing $100/month can expect an additional $0 a year in tax savings.
Program match on contributions:Minnesota no longer offers a matching grant. For years prior to 2011, a 15% or 10% matching grant of up to $400 per year was available to Minnesota residents, subject to income limitations.
State tax deduction or credit for contributions:Minnesota taxpayers may claim either a tax deduction or a tax credit depending on their income. A $1,500 tax deduction ($3,000 for a married couple filing jointly) can be claimed against Minnesota income tax. Alternatively, a tax credit equal to 50% of the contributions to accounts, reduced by any withdrawals, may be claimed with a maximum credit amount of up to $500, subject to a phase-out schedule starting at a federal adjusted gross income of $75,000.
State tax recapture provisions:In the case of a nonqualified or taxable distribution, the taxpayer is liable to state recapture of their tax benefit in the form of an additional tax for all prior years in which the benefit was claimed. The additional tax is determined by a statutory formula that multiplies the amount of the non-qualified withdrawal or taxable withdrawal by a "credit ratio" and a "subtraction ratio."
- The "credit ratio" is a ratio of (i) two times the total amount of credits that the account owner claimed for contributions to the accounts to (ii) the total contributions in all taxable years to the account owners accounts.
- The "subtraction ratio" is the ratio of (i) the total amount of subtractions that an account owner claimed for contributions to the account owner's accounts to (ii) the total contributions in all taxable years to the account owner's accounts.
The additional tax is calculated as 50% of the product of the credit ratio multiplied by the amount of the non-qualified or taxable withdrawal, plus 10% of the product of the subtraction ratio multiplied by the amount of the non-qualified or taxable withdrawal.
However, the Minnesota additional tax will not apply to any portion of a Non-Qualified Withdrawal that is subject to the federal additional tax.
State definition of qualified expensesThe state's definition of qualified education expenses currently includes expenses for attendance at an institution of higher education as defined by the Internal Revenue Code and its regulations addressing qualified state tuition programs. This does not include tuition for elementary or secondary education.
State tax treatment of qualified distributions:Qualified distributions from Minnesota and non-Minnesota 529 plans are exempt.
State tax treatment of rollovers:Minnesota follows federal tax-free treatment.
Does the sponsoring state exclude the value of an account for state financial aid purposes?No
Does participation in the program provide beneficiaries with any advantages in qualifying for resident tuition status at state institutions?No
Does the program have a formal agreement with a rewards program or outside scholarship program?Yes, the Upromise Rewards program can be linked to any 529 college savings plan. Upromise Rewards is free to join and offers members cash back for college.
Statutory protection of an account from creditors:UNLOCK PRO
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