529 Plan Deductions in New York
A 529 plan is a tax-advantaged education savings account offering federal tax-free growth and tax-free qualified withdrawals. New York sponsors the New York 529 Direct Plan, managed by Vanguard, which is one of the most widely used state plans in the country due to its low fees and broad investment options.
New York offers a state income tax deduction for contributions to the New York 529 Direct Plan or the New York 529 Advisor-Guided Plan. In 2025, single filers can deduct up to $5,000 per year, and married couples filing jointly can deduct up to $10,000. Contributions to out-of-state 529 plans do not qualify for the New York deduction.
New York residents who contribute to an out-of-state plan forfeit the state deduction, which can be worth several hundred dollars annually depending on their tax bracket. Rollovers from out-of-state plans into a New York plan are also deductible, giving families a path to recapture the state benefit if they switch plans.