Can I use a N.Y. 529 plan even though I live in N.J.?

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Q. I just moved to New Jersey from New York. I understand my contribution to a 529 plan is no longer deductible on state income tax returns. Can I still make contributions to the old New York plan?
— Saver

A. Welcome to the Garden State!

We’re glad to hear that you’re saving for college.

A Section 529 plan is a tax-deferred account designed to accumulate funds to pay for college tuition, room, board and most fees, said Claudia Mott, a certified financial planner with Epona Financial Solutions in Basking Ridge.

Then the Tax Cuts and Jobs Act of 2017 extended the use of 529 plans to include up to $10,000 a year for public, private or parochial elementary or secondary school, she said.

“There are 30 states which allow filers to claim a tax deduction for a 529 savings plan contribution and you are correct that New Jersey is not one of them,” Mott said.

You can still make contributions to the New York plan even though you’re no longer a resident there.

Email your questions to moc.p1610809195leHye1610809195noMJN1610809195@ksA1610809195.

This story was originally published on Dec. 30, 2020.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.

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