William Colton

The
New York
State College Savings Program

Dear Friend,

College has become an extraordinary investment for most working families today. That’s why the New York State Legislature passed the College Savings Program (also known as New York’s “529 College Savings Program”), allowing individuals to contribute to low-cost, tax-free college savings accounts.
The College Savings Program helps ease the financial burden that a college education places on family budgets.
If you have any further questions or comments, please contact my office.

Sincerely,

William Colton

Member of Assembly

The 529 College Savings Program is a tax- advantaged savings plan that enables people to invest for college. You can use this investment to pay for tuition, room and board, supplies and other qualified higher education expenses.
Individuals can open a Tuition Savings Account with as little as $25. There are no restrictions based on age, relationship or state residency of either the account owner or the beneficiary.
Anyone who opens an account can take advantage of the state tax deduction and tax-free withdrawals on earnings. The account owner may designate anyone he or she chooses as the beneficiary, including himself or herself. Participants will receive a deduction from their federal gross income for New York State income tax purposes of up to $5,000 per year. A husband and wife can deduct up to $10,000 per year in contributions to a single account. The funds can be used for higher education expenses, including tuition, fees, supplies, room and board, books and equipment, required for enrollment or attendance at an accredited undergraduate, graduate and professional institution of higher education or at an approved business, trade, technical or other occupational school. You can contribute on behalf of a beneficiary until the total balance of all program accounts held for the same beneficiary reaches $235,000. If there is more than one account owner contributing for the beneficiary, this is the total for all accounts. Once this limit is reached, you can no longer make additional contributions, but you can continue to accumulate earnings. You can get an application and information about the program by calling toll-free 1-877-NYSAVES or on the Internet, at: www.nysaves.org. The New York State Comptroller’s Office and the Higher Education Services Corporation (HESC) oversee this program. Program management was transferred from TIAA to the Upromise Investments and the Vanguard Group in November 2003. If you opened an account through the original program manager, TIAA, your investments were transitioned to comparable Vanguard investments. The College Savings Program Direct Plan offers 15 investment choices – three age-based options that automatically adjust your assets over time to more conservative allocations 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. Federal tax law provisions, which are effective through the year 2010, make the earnings component of a qualified withdrawal exempt from federal income tax. The earnings component of qualified withdrawals will continue to be exempt from New York taxes.