What Are the NY 529 Maximum Contribution Limits?
Explore the contribution rules for New York's 529 plan, from the overall account balance cap to the annual guidelines shaped by state and federal tax laws.
A 529 plan is a savings account with tax advantages for education-related expenses. These plans are sponsored by states, and New York offers its own version called NY’s 529 College Savings Program. There are specific limits on the total account value, federal guidelines that influence annual contributions, and state-specific tax deductions that savers should understand.
Aggregate Account Balance Limit
New York sets a maximum limit on the total value of a 529 account for a single beneficiary, which is currently $520,000. This figure is not an annual contribution cap but the total amount that can be held in the account. It includes all money deposited by any contributor, such as parents or grandparents, plus all investment earnings.
Once the account balance reaches the $520,000 threshold, no additional contributions can be made. The existing funds can continue to grow through investment returns, potentially pushing the balance beyond this limit. This cap is applied on a per-beneficiary basis, meaning the combined balance of all NY 529 accounts for the same child cannot exceed $520,000.
Annual Contribution Considerations
While New York’s plan does not impose a strict annual contribution limit, federal tax law influences how much individuals contribute. The IRS treats contributions to a 529 plan as gifts to the beneficiary for tax purposes. This means contributions are subject to the annual federal gift tax exclusion, which for 2025 is $19,000 per individual. A person can contribute up to this amount to a beneficiary’s account in a year without gift tax implications.
A married couple can combine their exclusions and jointly gift up to $38,000 to the same beneficiary in 2025. Any contribution exceeding these annual exclusion amounts must be reported to the IRS by filing Form 709, the United States Gift Tax Return. Filing the form does not necessarily mean taxes will be owed, as the amount first applies against a lifetime gift tax exemption.
A provision of 529 plans allows for “superfunding,” which permits an individual to make a lump-sum contribution of up to five times the annual gift tax exclusion at one time. This contribution is treated for tax purposes as if it were spread evenly over five years. For example, using the 2025 exclusion amount, an individual could contribute $95,000 in a single year, and a married couple could contribute up to $190,000 jointly.
To use this five-year averaging, the contributor must file a Form 709 for the year the large contribution is made. This election informs the IRS of the intent to apply the contribution over the five-year span. If this option is used, no additional gifts can be made to that same beneficiary during the five-year period without potential gift tax consequences.
New York State Tax Deduction on Contributions
New York provides a state income tax deduction for contributions made to its 529 plan. For a single taxpayer or a head of household, contributions up to $5,000 per year are deductible from their New York State taxable income. For a married couple filing a joint tax return, the annual deduction limit is $10,000. This benefit is available only to the account owner, as other contributors, such as a grandparent, cannot claim the state tax deduction.
Contributions must be made by December 31 to be eligible for a deduction on that year’s tax return. Should an account owner contribute more than the annual deductible amount, the excess is not lost. New York allows these over-contributions to be carried forward to subsequent tax years. The owner can then deduct the carried-over amount in a future year, subject to the same annual limits.