Savings Programs: NY 529 and NY ABLE

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Savings Programs

Residents can take advantage of two savings programs with tax benefits that help pay for college or disability expenses:

  • NY's 529 College Savings
  • NY Achieving a Better Life Experience (ABLE)

Comptroller DiNapoli administers the Direct Plan component of the college savings program with the New York State Higher Education Services Corporation. He is also trustee of the NY ABLE program and oversees all of its assets.  

NY’s 529 College Savings Program

The best line of defense against the rising cost of higher education is to start saving early. The 529 College Savings Program helps you do just that. Just about anybody can open a 529 account — parents, grandparents, other relatives, friends — as long as he or she is a U.S. citizen or a resident alien.

Earnings on your contributions grow tax free and withdrawals are not taxed if used for qualified educational expenses. If you're a New York State taxpayer, you can also benefit from the state tax deduction.

 Projected Cost
1 Year$28,418 
5 Years$32,944
10 Years$38,191
15 Years$44,274
18 Years$48,380

Flexible use of savings

  • Save for a child, grandchild, friend—or even yourself.
  • Use at any eligible 2- or 4-year college or university, vocational or technical school, apprenticeship program expenses, or graduate school in the United States or abroad, or for apprenticeship program expenses.
  • When used for higher education expenses at eligible educational institutions, money can be used to pay for tuition, certain room-and-board expenses, books, supplies, and the expenses for the purchase of certain computer equipment, software, and computer-related services.
  • Use for repayments on qualified education loans.
  • If the funds are not used, up to $35k may be rolled into a Roth IRA for the benefit of the beneficiary. Certain terms and limits apply.*

Tax benefits

  • Grow your earnings tax-deferred.
  • Pay no federal taxes on qualified withdrawals.** (Note: federal qualified expenses are different than New York State qualified expenses. Please consult the Disclosure Booklet and Tuition Savings Agreement for more information)
  • Contribute up to $95,000 in a single year ($190,000 if married filing jointly) for each beneficiary, without incurring federal gift taxes as long as you don't make any other gifts to that same beneficiary for five years.***
     

More tax benefits for New York taxpayers

  • Pay no state taxes on qualified withdrawals.** (Note: federal qualified expenses are different than New York State qualified expenses. Please consult the Disclosure Booklet and Tuition Savings Agreement for more information)
  • Deduct up to $5,000 ($10,000 if married filing jointly) in contributions to the Direct Plan on your State income tax return each year.***

Easy setup

  • Open an account with any amount you choose – there is no minimum contribution amount.

 

 

“The 529 Plan is a way to save for college education. Even if you put aside just a little bit of money each year, that money accumulates, and it’s a really great way to prepare for that expensive college education.” – New York State Comptroller DiNapoli

NY ABLE Program

The NY ABLE Program is a savings and investment plan that helps families and individuals with disabilities pay for medical and living expenses to maintain health, independence and quality of life.

This plan is intended to supplement benefits from programs like Medicaid, SSI and private insurance. Like a college savings account, there is no federal tax on savings added to a NY ABLE account, provided the funds are used to pay for qualified disability expenses.

 

 

“NY ABLE is an important program that helps change people’s lives for the better. The program allows New Yorkers to save for disability expenses without the risk of losing benefits from assistance programs.” – New York State Comptroller DiNapoli

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