Kristen McGuire | Development and Communications Manager | The Financial Clinic
(Originally published in NYATEP’s Workforce Buzz, February 20, 2018)
It’s tax time! How does that make you feel? Sweaty palms? Accelerated heart rate? Unfathomable despair?
Not this year. This year, the sun has risen over the world of New York State tax preparation — for the first time, filing state taxes means bringing college savings to millions of families. Think I’m crazy yet? Here’s the full story:
In late 2016, Governor Andrew Cuomo signed “Refund529” into law, allowing New Yorkers to split their state tax refund toward a direct contribution into a 529 college savings account. This was years in the making. As a coaching program and IRS free tax provider, we at The Financial Clinic knew that tax refunds held enormous promise as an opportunity for wealth building — for our customers, their refund can represent up to 40% of their annual income. We found that the majority of our filers were highly motivated to save for their children’s futures, yet struggled to do so because they were disconnected from mainstream financial services. 529 college savings accounts were the perfect fit, given they are well-known, safe, provide access for future contributions, and have built in tax benefits.
Together with Citizens’ Committee for Children of New York and the New York Asset Development Coalition, we advocated for Refund529. We are so grateful to the bill’s sponsors, Assemblyman David Buchwald (D-Westchester County) and Senator Thomas Croci (R-Suffolk County), who led a nearly unanimous vote through both houses.
Which brings us to present day 2018, when Refund529 is being implemented for the first time through tax form IT-195 (our new favorite number!). IT-195 is submitted with a filer’s return, making it easy to begin (or continue) saving for their children, grandchildren, or even their own education. Considering that kids with as little as $1 – $499 in savings are three times more likely to attend and four times more likely to graduate college — which in turn can nearly double a New Yorker’s future earnings — this is a huge step forward in ensuring the future of a strong workforce throughout the state.
What Can I Do?
We need your help to spread the word about this exciting new opportunity:
- Visit thefinancialclinic.org/refund529 to download a shareable flyer for customers
- Launch your own awareness campaign on social media using #Refund529
- Sign up for Clinic news to stay up-to-date on 529 resources – we’ll be creating tipsheets, flyers, and webinars throughout this tax season and beyond
Thank you for helping to bring New Yorkers to a pathway of lasting financial security!
P.S. Workforce development and financial security practitioners are cordially invited to Impact NOW (New Opportunities for Workforce) – a FREE professional development opportunity in New York City featuring interactive workshops, learning and sharing (and a breakout session led by NYATEP!). Visit tiny.cc/impactnow to learn more and register today!