New
York State Commissioner of Taxation and Finance Jerry Boone today
encouraged New Yorkers to open a New York State 529 College Savings
Plan. The program enables taxpayers to save for the costs of college
education for themselves, a child, grandchild, family member or friend
and potentially enjoy some tax savings. To take advantage of the
deduction on their 2015 tax returns, New Yorkers must enroll in the 529
Plan and make a contribution to their 529 accounts by December 31, 2015.
“Education
is always a sound investment,” said Commissioner Boone. “With the
rising cost of tuition and textbooks, the 529 College Savings Program
helps make higher education more affordable for college students while
offering valuable tax benefits to the 529 account owners who provide
additional financial support.”
“Studies
have suggested that having even a small amount of savings designated
for college positively impacts college enrollment and graduation,
particularly among children from low- and moderate-income families,”
said Higher Education Services Corporation Acting President, Elsa Magee.
“HESC joins Commissioner Boone and the New York State Department of
Taxation and Finance in encouraging New Yorkers to invest in the
educational future of a young person in your life this year by opening
or contributing to a 529 account.”
Last
year, New Yorkers deducted more than $1.5 billion in 529 College
Savings Plan contributions on their personal income tax returns. That
accounted for a direct savings of $70 million to taxpayers.
New
York State taxpayers who own 529 accounts can deduct up to $5,000 of
contributions to those accounts on their state income tax returns each
year. A married couple filing jointly can deduct up to $5,000 each for a
total of $10,000. It’s important to note that the amount deducted may be subject to recapture in certain circumstances such as rollovers to another state's plan or nonqualified withdrawals .
Although
contributions are not deductible for federal income tax purposes, all
earnings on contributions in the account grow tax free. Withdrawals
aren’t taxed either, as long as the money is used to pay for qualifying
college-related expenses such as tuition, textbooks, and room and board.
An
account can be opened for as little as $25, and there’s no monthly or
yearly minimum. Setting up automatic payroll deduction makes it even
easier to contribute to the College Savings Plan account.
Anyone
can create an account – parents, grandparents, family, or friends. The
plan offers a variety of investment choices as well.
Visit the following links for more information:
Source: New York State Department of Taxation and Finance
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