Minnesota College Savings Plan

Minnesota Revenue Notice # 00-09:

Individual Income Tax – Taxation of Qualified State Tuition Programs

Minnesota’s income tax treatment of contributions and distributions from a qualified state tuition program under Internal Revenue Code § 529 follows the federal income tax treatment as to who, when, and how much money is includable in taxable income regardless of whether the program is the Minnesota College Savings Program established under Minnesota Statutes, section 136A.241 or another state’s qualified tuition program. (See Minnesota Statutes, section 290.01, subdivision 19).

Further, income is taxable by Minnesota only if the taxpayer reporting the income is a Minnesota resident at the time the income is recognized (Minnesota Statutes, section 290.17, subdivisions 1 and 2(e)) regardless of where the state program was established.

Jennifer L. Engh
Assistant Commissioner for Tax Policy

Publication date: August 7, 2000
See: http://www.taxes.state.mn.us/individ/publications/revenue_notices/content/Revenue%20Notices%2000-09.shtml

To qualify for a matching grant, the account owner must have made a minimum $200 account contribution by December 31 and have made an annual application by May 1 of the year immediately after the calendar year in which contributions were made. In addition, the account beneficiary must meet Minnesota residency requirements and have a family income less than $80,000. Read the Disclosure Booklet at http://www.mnsaves.org/pdf/mn05_disclose.pdf for details.