New York State Comptroller Thomas P. DiNapoli today reminded New Yorkers that contributions to a New York State 529 College Savings Program account are tax deductible*.
New York’s 529 College Savings Program is an investment tool designed to help parents save for college. Contributions made by Dec. 31 can provide up to $10,000 in state tax deductions on 2016 income tax filings. Parents and other participants have paid for more than $1.1 billion in college-related expenses through the program since Jan. 1.
“New Yorkers should consider investing in a New York 529 College Savings account today and give the gift of savings for higher education this holiday season,” said DiNapoli. “Our program offers low fees and tax deductions for parents and loved ones who want to get a head start on saving for college. It’s never too early or too late to lay a foundation for a student’s future.”
New Yorkers can open an account and if they already have one can contribute and deduct up to $5,000 from their New York State taxable income. Married couples filing jointly can deduct up to $10,000 each year.
New York’s 529 College Savings Program began in 1997 and is overseen by the State Comptroller in partnership with the New York State Higher Education Services Corp. Parents, grandparents and others can use the program to save money to help cover qualified higher educational costs including tuition, certain room-and-board expenses, books and supplies. The program offers two plans that individuals can enroll in, the Direct Plan and the Advisor-Guided Plan.
The Direct Plan offers a broad array of investment options, including three age-based investment options that automatically rebalance the assets in the portfolio to become more conservative as the child approaches college age. There are more than 743,000 Direct Plan accounts valued at $19.1 billion. Since Jan. 1, 2016 New York’s 529 Program has paid out more than $984 million for college-related expenses to Direct Plan account holders.
The Advisor-Guided Plan offers age-based and asset allocation portfolios. This plan also gives the option to select individual portfolios by assembling a customized one using 15 individual investment options. There are over 190,000 Advisor-Guided Plan accounts valued at over $4 billion. New York’s 529 Program has paid out more than $142 million for college-related expenses to New York Advisor-Guided Plan account holders this year.
For information about New York State’s 529 College Savings Program, visit: https://www.nysaves.org/nytpl/literatureforms/getPDFForm.do?cmsPDF=DisclosureBooklet.pdf.
* May be subject to recapture in certain circumstances such as rollovers to another state's 529 plan or nonqualified withdrawals.
For access to state and local government spending and more than 50,000 state contracts, visit www.openbooknewyork.com. The easy-to-use website was created by DiNapoli to promote openness in government and provide taxpayers with better access to the financial workings of government.