If you contributed to the 529 plan, you will be able to claim a subtraction from income. If you withdrew money from your 529 plan, you may have to add the withdrawal back to your income if it was not used for educational purposes.
What is the New York 529 plan?
Its main purpose is to help families contend with the future high costs of their children’s or grandchildren’s college or vocational education.
What are the qualifications?
Qualified expenses include tuition, fees, books, supplies, and equipment required for enrollment or attendance; the purchase of certain computer equipment, software, internet access, and related services, if used primarily by the beneficiary while enrolled at an eligible educational institution; certain room and board expenses during academic periods in which the beneficiary is enrolled at least half-time; and certain expenses for students with special needs. Qualified expenses also include K-12 tuition of up to $10,000 per year per beneficiary.
What are the limits?
- $10,000 for married couples filing jointly
- $5,000 for single filers
What about carryovers?
You may perform a tax-free rollover of a 529 account for the same beneficiary as often as once every 12 months. You may move money by direct rollover (money is transferred directly from your current 529 plan custodian to New York's Direct Plan) or by indirect rollover (you request a check for the amount from the current 529 plan custodian and reinvest it in the Direct Plan within 60 days).
What if I don’t use it for education expenses?
Nonqualified withdrawals may be subject to federal income tax and a 10% federal penalty tax, as well as state and local income taxes
Your 529 account can be used to pay for qualified higher-education expenses at any eligible educational institutions, including:
- Postsecondary trade and vocational schools
- 2 and 4 year colleges
- Postgraduate programs
Where do I enter my 529 information?
To enter your 529 information within the program, please go to:
- State Section
- New York Return
- Edit
- Subtractions from Income
- Enter the contributions that were made to an account established under New York 529 college savings program
As well, New York allows you to apply your state refund to your 529 plan. To do this, please go to:
- State Section
- New York Return
- Edit
- Payments
- Apply portion of refund to your NYS 529 College Savings Account (IT-195)
For more information regarding the New York 529 College Savings Program, please click here.