State Reminds Parents of College Savings Plan

As the gift-giving season culminates and the New Year quickly approaches, State Comptroller Thomas DiNapoli is reminding parents of New York’s 529 College Savings Program.

Direct Plan is an option for parents and families to help offset college costs and provides up to $10,000 in New York State tax-deductions annually. It features an array of investment options, including three age-based investment options that automatically re-balance the assets in the portfolio to become more conservative as the child approaches college age. As with any investment, returns are not guaranteed.

New Yorkers can deduct annual contributions made to their 529 College Savings Program accounts on their 2013 return if they are made by Dec. 31. New York taxpayers who are account owners can contribute to the Direct Plan and deduct up to $5,000 from their New York State taxable income, and married couples filing jointly can deduct up to $10,000 each year. Qualified withdrawals are exempt from both federal and state income taxes.