State Urges Citizens to Contribute to 529 College Savings Plan

With the holiday season here and the end of the year quickly approaching, the state comptroller’s office encourages New Yorkers to open or contribute to an existing 529 college savings plan as a holiday gift and take advantage of the tax write-off at the end of the year.

New Yorkers can deduct annual contributions to New York’s 529 college savings plan on their 2012 return if they are made by December 31, 2012. Taxpayers who are account owners can contribute to the direct plan and claim a deduction up to $5,000, and married couples filing jointly can claim a deduction up to $10,000 each year. Qualified withdrawals are exempt from both federal and state income taxes.

Students can use the money for tuition, certain room-and-board expenses, fees, books, supplies and equipment and other qualified higher-education expenses.

For more information about the 529 program visit osc.state.ny.us.