New York 529 College Savings Plan
The New York 529 College Savings Program, called Direct Plan, is designed to provide you with flexible savings options while you save for higher education. The plan includes features such as tax free withdrawals and state tax deductions for New York residents.
New York 529 Plan Eligibility
Direct Plan is open to all U.S. citizens and residents who have a social security number or TIN. New York residency is not required and there aren’t any income restrictions to participate in the NY 529 plan.
Opening an account is simple. You can complete your enrollment online at www.nysaves.org or complete and mail an enrollment application to the NY 529 Direct Plan office.
Like most 529 plans, only one beneficiary can be named per account. Relation to the beneficiary is not required and you can even name yourself as a beneficiary if you are saving for your own education in the future.
Contributions to the Account
The minimum contribution both for opening and for future contributions is $25. Anyone can make a contribution to an account, but only the account owner can manage the investments within the account.
Contributions can be sent in until the account reaches a value of $375,000. Once the 529 account reaches this amount, future contribution cannot be made. The account can continue to grow, however, new contributions are not permitted.
NY 529 Tax Deductions
Account owners who are New York State taxpayers may be eligible to take a New York State income tax deduction for contributions made to the 529 plan. Single tax payers may deduct up to $5,000 of their 529 contribution from their New York State taxes. Couples who file jointly may claim up to $10,000 as a deduction from their New York State taxes.
The New York 529 plan uses Vanguard as their fund manager. You can choose from 16 different fund options that include both age-based investments and individual portfolios that don’t adjust with age.
If you are enrolled in UPromise, you can set aside money towards your 529 plan when you buy everyday items. The Upromise program allows you to earn money when you shop online, buy groceries, and even when you’re eating out. Rewards range from 1% to 25% based on the item you’re buying. For more information on Upromise, see our review.
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The Age Based Portfolio Includes:
The Individual Portfolio Includes:
Aggressive Growth Portfolio
Developed Markets Index Portfolio
Growth Stock Index Portfolio
Mid-Cap Stock Index Portfolio
Small-Cap Stock Index Portfolio
Value Stock Index Portfolio
Conservative Growth Portfolio
Moderate Growth Portfolio
Bond Market Index Portfolio.
Inflation-Protected Securities Portfolio
Interest Accumulation Portfolio
Fees and Expenses
The New York 529 plan has very low fees of 0.25% as the total management expense fee. This includes both the underlying fund fee from Vanguard as well as the Direct Plan fee for managing the 529 plan.
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