May 30, 2014
By Stephanie West
New York, NY – New York State’s 529 College Saving Program has helped New York residents pay for more than $230 million in college-related expenses in 2014. The investment program is designed to help parents save for college and offers tax deductions up to $10,000 annually.
“A smart way to combat rising college costs is to plan ahead. It’s never too early to begin saving for your child’s future,” New York State Comptroller Thomas P. DiNapoli said.
"I encourage parents and loved ones to take advantage of this opportunity and open an account today. Saving for college now can make a significant difference in a student’s life later.”
New York’s 529 College Savings Program offers two plans, the Direct Plan and the Advisor Plan, both of which are offered to individuals across the country. While parents make up the largest share of account owners, anyone can open a 529 account on behalf of a child. A Direct Plan account can be opened for as little as $25. The Direct Plan offers three age-based investment options that become more conservative as the child approaches college age. The Advisor Plan is for account owners who choose to invest through a financial advisor.
Section 529 of the Internal Revenue Code, which authorizes the College Savings Program, was enacted in 1996. New York State taxpayers are eligible for a tax deduction on annual contributions made to their 529 College Savings Program accounts. Individual New York taxpayers who are account owners can contribute to the program and deduct up to $5,000 from their state taxable income, while married couples filing jointly can deduct up to $10,000 each year. The earnings portion of qualified withdrawals are exempt from both federal and state income taxes.