Helping New York Families Save for College
If you aren’t a tax attorney like State Assemblyman David Buchwald, your eyes may glaze over when you look at income tax forms. But this year, look carefully as the New York State income tax form includes a new way to help you save for college for a child, grandchild, friend or even yourself. New on this year’s New York tax forms, you can directly deposit your state income tax refund into a 529 college savings plan.
Sponsored by Assemblyman Buchwald back in 2016, and unanimously passed by both the State Assembly and Senate, a new law (Chapter 454 of the Laws of 2016) is now in effect. This makes it easy to send your refund dollars right to your 529 college savings account using the newly created Form IT-195, which is submitted along with your resident or non-resident return.
Those savings can grow tax-free when used to pay for higher education expenses, including tuition, room and board, books and other supplies. New York State residents are encouraged to save for higher education using this program, and the earlier you get started the better.
“Government should empower citizens, and that is all the more important when it comes to families saving for their children’s college education,” said Assemblyman Buchwald (D-Westchester). “529 plans are an excellent way for parents, grandparents, other family members and friends to help provide their loved ones affordable access to higher education.”
"It’s never too early or too late to lay a foundation for a student's future and we should do all we can to help individuals save for college,” said New York State Comptroller Thomas P. DiNapoli, whose office administers the state’s 529 College Savings Program. “Our plan consistently ranks among the best and offers tax deductions to those who open accounts. Now with Assemblyman Buchwald’s bill New York taxpayers who are friends and family of college-bound students can send their tax refunds directly to the plan and help build students’ savings.”
“The research demonstrates that even a small amount of college savings (less than $500) gives children a college identity, making it three times more likely that they will attend college than students without any college savings,” said Jennifer March, Executive Director, Citizens’ Committee for Children. “With new tax forms ready, this opportunity has the potential to be transformative for New York’s families as it makes saving for college easier. We are so grateful to Assembly member Buchwald, the Governor, and the members of the Senate and the Assembly for passing this new law, and we look forward to working with them to get the word out to make certain New Yorkers and tax preparation experts take advantage of this option.”
“Allowing filers to directly contribute their refund into a 529 account provides an unprecedented opportunity for New Yorkers to save for their children's education,” said Mae Watson Grote, Founder and CEO of The Financial Clinic. “Research shows that students who have as little as $1 - $499 in savings are three and a half times more likely to attend college, and considering a college degree has the potential to almost double a New Yorker’s earnings, this is a clear step to creating a secure future for our workforce. We are so grateful to Assemblyman Buchwald, Senator Croci and Governor Cuomo for their commitment to New York families, and to our partners at New York Asset Development Coalition for their years of advocacy that made this dream a reality.”
“Making it possible for New Yorkers to direct a portion of their state tax refund directly into New York’s 529 college savings plan is a practical and convenient way for New Yorkers to save for college. Removing impediments and making it easier for families to prepare for college expenses is a smart way for New York to help families achieve their college dreams. We are committed to college access and affordability and hope all families will consider taking advantage of this improvement to New York’s 529 college savings plan,” said Mary Beth Labate, President of the Commission on Independent Colleges and Universities.
Senator Thomas Croci (R-Suffolk County) carried the bill in the State Senate and was instrumental in getting the bill passed unanimously in both houses.
To open up a college savings account, visit https://www.nysaves.org/home/open-ny-529-account.html.