The New York’s 529 college savings plan is very convenient for parents who are looking for a way to pay for their child’s college education. The plan is extremely flexible and a low-cost way to save for college tuition. With the program you will be given a wide range of investment options which will be tax-free. These withdrawals can be taken by direct deposit straight from your bank account so you do not have to worry about making monthly contribution payments.
New York 529 college savings plans can also be a great way for friends and grandparents to get involved and help with your young students college payments. These college savings plans can be great gifts which carry with them a lot of benefits. Here are some of the benefits that you can take advantage of from New York’s 529 college savings plan.
Minimal Initial Investment Amounts
In most cases when you open a savings plan you must include an initial investment. The 529 plan offers the option of opening a savings account with as little as $25. You can contribute monthly payments by check or automatic investments. You can even deduct monthly payments from your payroll through your employer. Having total control over your college savings plan can be very beneficial when making decisions on how much money you would like to invest in your child’s future.
Low Monthly Fees
Unlike most investment accounts there are minimal fees that you will have to pay with your 529 plan. These fees normally average out to about .25% of the total plan. These minimal management fees are extremely affordable and only exist for these types of savings programs.
Eligibility Requirements for New York’s 529 Plan
Broad eligibility requirements make it easy for US citizens as well as resident aliens to invest in their children’s college. As long as you have a valid Social Security number or taxpayer identification number you are eligible to participate. You also must be 18 years or older and be a permanent US resident.
The Tax Advantages of New York’s 529 Plan
There are many different tax advantages that the 529 plan includes. All withdrawals are exempt from the New York State income tax when we are used for higher education expenses. New York taxpayers can also deduct up to $5000 of their contributions on their state tax returns. If you are married you can jointly apply a $10,000 joint credit. There are also gift tax advantages which can also be affected by your monthly contributions. Each beneficiary can have a $65,000 a year gift tax provision. Once one of these gift taxes is taken advantage of they can only be used once over a five-year period of time.
Living in New York can be very expensive. Attending college at a New York State University can be a troublesome experience for any student that needs to pay for their own tuition. The 529 savings plan is a great way for families to help their young children get off to a fresh new start while not having to carry along the burden of unwanted college debt. Take advantage of the many benefits that are offered by these amazing college savings plans.