A new bill passed by the New York State Senate last week and now awaiting passage by the Assembly will help parents who send their children to yeshiva, parochial, and other nonpublic schools save more of their hard-earned dollars. The legislation, sponsored by Senator Marty Golden (R-C-I, Brooklyn), makes New York’s tax law consistent with changes to 529 plan tuition eligibility that recently took effect on the federal level.
The federal Tax Cuts and Jobs Act enacted by President Trump last year expanded the traditional limits of 529 plans, which help ease the burden of college tuition, to include tuition expenses for all nonpublic elementary or secondary schools. Currently, New York tax law considers these tuition expenses ineligible for 529 plan benefits.
The Senate bill (S7783) enables 529 plan distributions used to pay for elementary or secondary-school tuition expenses incurred after January 1, 2018, to have the same tax benefits as distributions used for attending an eligible institution of higher education.
“My bill will allow New York’s nonpublic school families to take full advantage of their 529 plans on their New York State income taxes,” said Senator Golden. “All New York families, regardless of where their children go to school, deserve the same benefits and choices granted by the federal government.”
Senate Majority Leader John J. Flanagan said, “Senator Golden’s bill expanding 529 plan eligibility is an important part of a sweeping affordability package we passed this week that provides billions of dollars in taxpayer savings by focusing on property taxes, energy costs, unfunded mandates, and other drivers that are making it harder for middle class families to succeed.
“We want parents to have the freedom to choose which school their children attend, but when that choice is a nonpublic school, a yeshiva, or a parochial school, it can be a real financial sacrifice. Parents work hard to make that choice, and the Senate Republicans are right behind them, also working hard so that all New Yorkers can achieve the benefits of genuine tax relief.”