529 Plan and College Savings

Archive for February, 2009

Question: I live in NY, should I use a NY 529 Plan to save for my son’s college bills?

My son is 1 years old and he got $1000 from his grandfather for his birthday with the requirement that it be put in a 529 Plan. Which state should we use?

We live in NY. We don’t want to pay high fees. Also, my understanding is that no matter which state we get the plan in he can choose to go to college in any state, is that correct? What are the tax benefits of using a NY plan?

Thanks!

Answer: NY (but not the federal government) allows you to deduct contributions to the NY plan from your taxable income for the year of the contribution.

Your Money: Watching Your 529 Plan