Help your grandchild pay for higher education while saving on your taxes and staying in control of your investments.
As a Direct Plan account owner, you can:
Help your family
You can help reduce your family's future debt by saving for your grandchild's higher education now.
Keep control of the account
A Direct Plan account allows you to control how your investments are spent, unlike some other types of accounts. A custodial account under the Uniform Gifts/Transfers to Minors Act (UGMA/UTMA), for instance, lets your beneficiary use the money for any purpose once he or she reaches the age of majority.
You'll also be able to manage your investments and have access to account information at any time.
Save on your taxes
If you're a New York taxpayer, and a Direct Plan account owner, you can deduct up to $5,000 ($10,000 if you're married filing jointly) of your account contributions when you file your state income taxes.* (If the child's parents invest your college savings gift in an existing 529 account, you won't be able to take this deduction.)
Minimize your estate taxes
Giving your grandchild the gift of higher education may also help you reduce your estate and save on estate taxes.
You can contribute up to $15,000 a year ($30,000 if married filing jointly) without incurring gift taxes. Or you can choose a special election that allows you to treat a single $75,000 contribution ($150,000 for married couples) as if it were made over a 5-year period.**
Open as many accounts as you want
No matter how many grandchildren you have, there's no limit on the number of accounts you can open and contribute to for different beneficiaries.