In terms of location, the money from your account in the New York Direct Plan can be used at any eligible postsecondary school in the United States and abroad.Ĭan the funds be used for anything other than general tuition? This means that even if your beneficiary decides to enter a trade rather than attend college the funds are likely going to be available so long as they attend training at an eligible institution. Important to note is that the language specifically includes vocational or postsecondary institutions. According to the IRS the funds can be used at any “eligible educational institution”, which is defined as “any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U.S.
#Nys 529 eligible expenses 2015 code#
Generally, if a school has been assigned a federal school code by the Department of Education, it’s an eligible institution under Section 529. You can be an aunt, uncle, cousin, godparent, friend or neighbor so long as you meet the criteria listed above.Ĭan my beneficiary use the 529 plan funds at ANY college or university? Is it restricted to NY colleges or universities? Most importantly, this means that you do not have to be a parent or a grandparent to open a plan for a loved one. You don’t have to live in New York to participate. citizen or resident alien with a valid Social Security number or taxpayer identification number. The beneficiary (or student) must also be a U.S. A valid Social Security number or other taxpayer identification number, and.The NYS Direct Plan has no income restrictions and is open to U.S. Who can open a New York’s Direct Plan account? The account funds are usually invested in mutual funds, and earnings from these accounts are tax-free. Funds contributed to such accounts are invested to pay for a grandchild’s college tuition, room and board, or other expenses. This type of account, named for Section 529 of the Internal Revenue Code, enables you to reduce your taxable estate while earmarking funds for the higher education of a grandchild (or any other family member). The video above also does a good job explaining how 529 plans work. As most questions that I receive come from elderly clients, my main focus in this blog post will be on how 529 plans work in the terms of a grandparent seeking to fund a plan for a grandchild. From a marketing standpoint it hits right at a long term concern that those with young children in their family think of often how in the world will my children be able to afford college when they graduate from high school? Couple this with the very good tax advantages that accompany a plan and you will see that from a general estate planning perspective the plans are very useful to both the beneficiary child AND the person funding such a plan. If you haven’t seen them, the advertisements feature adorable children imploring their parents and/or grandparents to use a 529 plan to help them pay for college. I usually get calls and questions about 529 plans because of the television campaign run by the state.
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