529 plan funds typically are invested in stocks and bonds. Funds can be spent on tuition and other college costs without paying tax on earnings. In addition, Minnesota since 2017 has offered state income tax incentives for filers who contribute to a 529 plan. Those making under $75,000 can get a nonrefundable $500 tax credit if they contribute at least $1,000; the credit phases out to $0 for married couples reporting $160,000 in adjusted gross income. However, high-income earners can save as much as $3,000 by electing a 529 tax deduction instead.