The program named NY’s 529 College Savings Program is a family program specially designed for tomorrow’s youths. The New York City Employees may use this program to plan their kid’s future and save for their college. The process is pretty simple, and the contribution may be really little as well. However, using this program, one may save for the future in a tax-advantaged way. If you wish to get to more about this, take a look at these details-
- What is NY’s 529 College Savings Program?
The NY’s 529 College Savings Program is a wonderful plan for the New York City employees to plan their children’s future. Using this plan, New York families may start saving for the college of their children. The best part is that. This plan allows the employees to save in a tax-advantaged way. On top of everything, the process is really easy as the money for contribution goes via easy payroll deductions.
This is a really good plan to contribute to the future of the children. They may contribute to this plan even with a really little sum as well. The best part is that the contribution or payroll deduction can be changed at any time as per the needs.
- Eligibility Criteria for NY’s 529 College Savings Program:
There are no restrictions for this program regarding eligibility. From a parent, grandparent, to a relative, anyone can save for a future college student. The conditions related to age, State, or income are not valid for this as well.
- Options of Investment for this program:
Numerous investment options are available for this NY’s 529 College Savings Program. The options are depended on age, and there are several portfolios as well. Age-wise there are three investment options to choose from. On the other hand, there are 13 individual portfolios available for investment as well.
- What are the tax-related advantages of this program?
There are several tax advantages to this program. Take a look at what kind of advantages a City employee may get benefitted from using this NY’s 529 College Savings Program:
- The contributions made for this program are not deductible for various purposes of federal tax. So, this is not like a taxable account. Here the assets are tax-free. As a result, availing of this plan gives the employees the chance of growth on a long-term basis.
- If the money withdrawn from this account is used for educational purposes and regarded as Qualified Withdrawals, the withdrawn amounts are free of Federal and New York State income tax.
Examples of such expenses are- tuition, fees, room and board, books, and supplies. The expenses made for any equipment necessary for enrollment or attendance at any eligible post-secondary school is also free of tax.
- The employee may receive a New York State income tax deduction up to $5000 as well.
The amount is double for married couples who fill in the form jointly. So, married couples can receive a great deduction of up to $10000.
However, if someone has a residence in any other state or pays tax at some other state, they may get interested and consider the availability of the 529 plan in that State.
- Features and usage of Proceeds from the account:
Proceeds from the account can be used for paying tuition fees and other higher education expenses of the beneficiary of that person at any eligible school, college, or university.
However, one should know what kinds of expenses get covered by this. The Qualified higher education expenses are-
- Tuition
- Fees
- Room and board
- Books
- Supplies
- Equipment required for enrollment or attendance
- Program Management Information:
Two bodies are responsible for the proper implementation of this program. Those two bodies are-
- The Comptroller of the State of New York
- The New York Higher Education Services Corporation
For this program’s day-to-day operation, the responsible person is the program manager, Ascensus College Savings.
On the other hand, managing the investment of Direct Plan Assets is upon the investment manager, The Vanguard Group.
- Points to be noted:
There are multiple crucial things that one should know before availing of this program-
- The contributory amount for this program is not pre-tax.
- There will be no reflection of this amount on the W-2 Wage and Tax Statement.
- The tax deduction can be mentioned when the terms of New York Tax returns are met.
- One should carefully read and notice the enrollment information. One should also focus on the risks associated with this investment.
The NY’s 529 College Savings Program is a good one. However, one should be aware of all the profits and risks before investing.