MELVILLE, N.Y. (CBSNewYork) — There is increased stability under the new federal tax plan for those who use a 529 college savings plan.
As CBS2’s Jessica Moore reported, you can now use the money to pay for your child’s grade school and high school education.READ MORE: Exclusive: Cellphone Video Shows NYPD Sergeant Throw Man To Ground During Violent Arrest On Lower East Side
When President Donald Trump signed the new tax plan, there was an added wrinkle for anyone using the tax-free 529 plan to send their children to college.
“It’s expanded now, in that you can use it now under the new act for elementary and secondary schools,” said Chris Cheeseman of Marcum Certified Accountants.
The biggest beneficiaries will be parochial and private schools that charge parents tuition for the education they provide. Some families on Long Island welcome the change.
“It would be very useful if you decide to send your kids to private school,” said Varghese Cherian of Dix Hills. “If they’re in public schools, it’s not as helpful, but at least it’s an option if you want to go that route.”
Bob Semprini of Commack only wishes Congress had taken this action years ago.
“I think it’s great,” Semprini said. “I had three kids who went to Catholic elementary school and Catholic high school. It cost me a lot of money, but it’s my choice with my life, although I got no type of tax credit.”READ MORE: New York City Councilmember 'Baffled' By Mayor's Hesitance To Mandate Masks As Delta Variant Spreads
But public schools are worried that expansion of the 529 plan could shrink their student population and state aid. Suffolk County resident Gail Reiser said that is what her property taxes are for,
“You’re still sending your taxes to the public schools, so the 529 expansion doesn’t change anything with the public schools,” said Reiser, of Fort Salonga.
But some residents worry here will be no money let for college – and another potential drawback.
“You would have to worry about the interest if you use it too early. You’re not going to get 15 years of interest. Instead, you may get only two, three years of interest – so that’s something to worry about,” said Matt Horton of East Meadow.
Cheeseman said, “That’s always a concern, so it’s always advisable to sit down with your investment adviser.”
Cheeseman said the biggest advantage is whatever families contribute can be completely deducted from their taxable earnings.MORE NEWS: Criminal Justice Expert Says Police Intervention Only Part Of Solution To New York City's Gun Violence
The 529 expansion goes into effect Monday, Jan. 1.