If you are the one who set up the account for the beneficiary, you can take the deductions for the contributions.
- Unlike a taxable account, your assets compound tax-free, giving you better potential for growth over the long-term (Contributions are not deductible for federal income tax purposes.)
- Your withdrawals are free from federal and New York State income tax when used to pay for qualified education expenses (Qualified Withdrawals). For example, tuition, fees, room and board, books, supplies, and equipment required for enrollment or attendance at any eligible post-secondary school in the world.
- You can receive a New York State income tax deduction of up to $5,000 ($10,000 for married couples filing jointly).
Proceeds from your account can be used to pay tuition and other qualified higher education expenses of your beneficiary at any eligible undergraduate or graduate public or private college or university or trade, vocational, or professional school.
Qualified higher education expenses include:
- Tuition
- Fees
- Room and board
- Books
- Supplies
- Equipment required for enrollment or attendance at any eligible post-secondary school in the world
See here for more information about the New York 529 program.
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