With the passage of this year’s ambitious federal tax reform bill came a whole lot of changes at the regional level. And while every state will inevitably handle these major tax changes differently, families in New York should take notice of some recent activity of particular importance to parents who want the best for their kids’ futures.
As Clifford Michel writes at the Staten Island Advance:
The bill — recently introduced by Assemblyman Ron Castorina — takes advantage of an opening in President Donald Trump’s recently passed Tax Cut and Jobs Act, which expanded the usability of 529 Savings Accounts to include private elementary, middle, and high schools.
Castorina’s bill would prevent New York state from collecting taxes on contributions and withdrawals to the savings accounts.
“This bill would enable families to start saving for their child’s primary education. As in many cases within my district, families opt to send their children to private schools,” Castorina said in a statement. “However, the costs of tuition within these schools follow the upward trend of national education costs.”
The tax-advantaged 529 Savings Accounts allow for funds to grow in a mutual fund. Contributions to the account can be used on tuition and certain expenses directly related to a child’s education, such as a laptop.
In New York, married couples filing jointly can deduct up to $10,000 annually from their state taxable income for contributions to their 529 plan. Individuals can deduct up to $5,000 per year for contributions.
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