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December 13, 2012


DiNapoli Encourages New Yorkers To Invest In A 529 College Savings Plan This Holiday Season

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With the holiday season here and the end of the year quickly approaching, New York State Comptroller Thomas P. DiNapoli today encouraged New Yorkers to open or contribute to an existing 529 College Savings plan as a holiday gift and take advantage of the tax write-off at the end of the year.

“Investing in a 529 plan is an opportunity for loved ones to give meaningful gifts this holiday season while realizing tax benefits throughout the year,” said DiNapoli. “Investing a little now could mean big savings when a child is ready to begin college. Research shows that when children have college savings they are more likely to further their education beyond high school.”

New Yorkers can deduct annual contributions to New York’s 529 College Savings Plan on their 2012 return if they are made by December 31, 2012. New York taxpayers who are account owners can contribute to the Direct Plan and claim a deduction up to $5,000 and married couples filing jointly can claim a deduction up to $10,000 each year.* Qualified withdrawals are exempt from both federal and state income taxes.**

Students can use the money for tuition, certain room-and-board expenses, fees, books, supplies and equipment and other qualified higher-education expenses.

The plan, sponsored by the State of New York, features a broad array of investment options, including three age-based investment options that automatically rebalance the assets in the portfolio to become more conservative as the child approaches college age.

Alternatively, investors may assemble a customized portfolio using 13 individual investment options, which are static portfolios that investors may choose based on their risk tolerance. As with any investment, returns are not guaranteed.

For more information about the 529 program visit

*May be subject to recapture in certain circumstances – rollovers to another state’s plan or non-qualified withdrawals.

**Earnings on nonqualified withdrawals may be subject to federal income tax and a 10% federal penalty tax, as well as state and local income taxes. Tax and other benefits are contingent on meeting other requirements, and certain withdrawals are subject to federal, state, and local taxes.

The Comptroller of the State of New York and the New York State Higher Education Services Corporation are the Program Administrators and are responsible for implementing and administering the Direct Plan. Upromise Investments, Inc., and Upromise Investment Advisors, LLC, serve as Program Manager and Recordkeeping and Servicing Agent, respectively, and are responsible for day-to-day operations, including effecting transactions. The Vanguard Group, Inc. serves as the Investment Manager. Vanguard Marketing Corporation markets, distributes, and underwrites the Direct Plan.

No guarantee: Neither the State of New York; its agencies; the Federal Deposit Insurance Corporation (FDIC); The Vanguard Group, Inc.; Upromise Investments, Inc.; nor any of their applicable affiliates insures accounts or guarantees the principal deposited therein or any investment returns on any account or investment portfolio.

New York's 529 College Savings Program currently includes two separate 529 plans. The Direct Plan is sold directly by the Program. You may also participate in the Advisor Plan, which is sold exclusively through financial advisors and has different investment options and higher fees and expenses as well as financial advisor compensation.

Before you invest, consider whether your or the designated beneficiary’s home state offers any state tax or other benefits that are only available for investments in such state's qualified tuition program.

For more information about New York’s 529 College Savings Program Direct Plan, obtain a Program Brochure and Tuition Savings Agreement at or by calling 1-877-697-2837. This includes investment objectives, risks, charges, expenses, and other information. You should read and consider them carefully before investing.

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