Among the myriad of changes in the Tax Cuts and Jobs Act (TCJA) passed in December 2017, 529 plans can now be used for primary and secondary school expenses up to $10,000 per year per beneficiary. Prior to the new law, 529 plans were explicitly used for qualifying college expenses.
Importance for New York State Residents New York allows an annual state tax deduction ($5,000 for an individual or $10,000 for a married couple) for contributions to the NY 529 program. With marginal NYS income tax rates for most individuals between 6-7%, this means an average couple can save $600-$700/year.
Advanced Planning Considerations The expansion of 529 qualified education expenses also creates a further opportunity for legacy education planning. Parents and grandparents with long-term goals of covering education costs for family members will now find 529 accounts even more appealing.
Bottom Line If you currently pay private school tuition, contributing to a 529 account should strongly be considered.