Program Features | Investment Options | Tax Benefits | Frequently Asked Questions

New York's 529 College Savings Program Direct Plan provides a flexible, convenient, and low-cost way to save for college. The Program features a wide range of investment choices, tax-free withdrawals when used for qualified higher education expenses, and contributions that are tax-deductible (up to certain limits) for New York State residents.

You can save for a child, grandchild, friend — or even yourself. And the Program includes a valuable opportunity to accelerate your college savings through Upromise Rewards — a free service that returns a percentage of your spending at hundreds of America's leading companies and can transfer that money directly to your Program account.

Here are some of the highlights of New York's 529 College Savings Program Direct Plan:

• Low initial investment amounts. You can start with as little as $25. You can contribute by check, automatic investment, electronic bank transfer, payroll deduction (if available through your employer), or by moving assets from other college savings vehicles.



• Low fees. Your only expense is a management fee of 0.55%, one of the lowest of any 529 plan.



• Federal income tax advantages. Your assets grow tax-deferred and earnings on your withdrawals are exempt from federal income tax when used for qualified higher education expenses.*
  
  Under new legislation, qualified distributions from 529 plans will be permanently federally tax-free. Learn more.



• Additional advantages for New York State taxpayers. Withdrawals are exempt from New York State income tax when used for qualified higher education expenses. New York taxpayers can also deduct up to $5,000 of contributions ($10,000 for a married couple filing jointly) from their state taxable income each year for their contributions to their accounts. If you are a resident or taxpayer of another state, you should consider whether that state offers a 529 plan with tax advantages or other benefits that are not available through this Program. Note: Only the account owner may take advantage of the tax deduction for their contributions to their accounts.



• Unlimited account access. You can open and manage your account online and choose to receive account statements and transaction confirmations online through www.nysaves.org.



• Broad eligibility. The Program is open to all U.S. citizens and resident aliens with a valid Social Security or taxpayer identification number. You can use your account to pay for tuition, fees, books, room and board, and supplies at any eligible post-secondary school in the United States and abroad.



• Fifteen investment options by Vanguard. Choose from three age-based options that adjust your assets over time to more conservative allocations as your beneficiary nears college and 12 individual portfolios that you adjust yourself according to your own investment strategy and risk tolerance. You can select up to five investment options per account.



• Higher contribution limits. You can contribute on behalf of a beneficiary until the total balance of all Program accounts held for the same beneficiary reaches an aggregate maximum balance which is currently $235,000. If there's more than one account owner contributing for the beneficiary, this is the total for all accounts.



• Gift tax advantages. You can contribute up to $60,000 in a single year ($120,000 for a married couple filing jointly) for each beneficiary without incurring federal gift tax provided you don't make any other gifts to that beneficiary for five years.



• Experienced management. The Program is managed by Upromise Investments Inc., with investment management and account services provided by Vanguard.**

For additional information, see the Program Brochure and Tuition Savings Agreement.