The power of tax-free growth

With the Advisor-Guided Plan, investment earnings compound on a tax-deferred basis, and qualified withdrawals are entirely free from federal and state income taxes.¹ And because your account is tax-deferred, it has the potential to grow more quickly than taxable investments earning the exact same returns.

Accumulate $23,000 more with a tax-free 529 plan
Investment growth over 18 years

Source: J.P. Morgan Asset Management. Illustration assumes an initial $1,000 investment and monthly investments of $300 for 18 years. Chart also assumes an annual investment return of 6%, compounded monthly, and federal tax rate of 35%. Investment losses could affect the relative tax-deferred investing advantage. This hypothetical illustration is not indicative of any specific investment and does not reflect the impact of fees or expenses. Each investor should consider his or her current and anticipated investment horizon and income tax bracket when making an investment decision, as the illustration may not reflect these factors. These figures do not reflect any management fees or expenses that would be paid by a 529 plan participant. Such costs would lower performance.

This chart is shown for illustrative purposes only. Past performance is no guarantee of future results.

Additional tax benefits for New York state taxpayers

New York taxpayers who open an account in New York's 529 Advisor-Guided College Savings Program can enjoy additional tax benefits. Account owners can deduct up to $5,000 ($10,000 if married filing jointly) in contributions from New York state income taxes each year.²

Potential tax savings for residents of other states

In some states, contributions to any 529 plan are eligible for the state's income tax deduction, and residents are not required to choose the in-state plan to get the benefit. Before investing, you should consider whether your home state offers any state tax or other benefits that are only available to residents. Your financial professional or tax professional can provide additional details.

Special estate and gift tax benefits

Contributions to 529 plans are considered completed gifts, which means current assets and future earnings are excluded from your taxable estate for federal estate tax purposes – even though you retain control of the assets for the life of the account.³ 529 plans also allow you to contribute five years' worth of gifts in one year, up to $75,000 per beneficiary (or $150,000 if married and filing jointly) without incurring a federal gift tax, making it a valuable way to reduce the size of your taxable estate or make up for lost time as beneficiaries approach college age.⁴

¹ Earnings on federal nonqualified withdrawals may be subject to federal income tax and a 10% federal penalty tax, as well as state and local income taxes. New York State tax deductions may be subject to recapture in certain additional circumstances such as rollovers to another state's 529 plan, or withdrawals used to pay elementary or secondary school tuition, registered apprenticeship program expenses, or qualified education loan repayments as described in the Disclosure Booklet and Tuition Savings Agreement. State tax benefits for non-resident New York taxpayers may vary. Tax and other benefits are contingent on meeting other requirements. Please consult your tax advisor about your particular situation.

² New York State tax deductions may be subject to recapture in certain circumstances such as rollovers to another state's 529 plan, federal nonqualified withdrawals, or withdrawals used to pay elementary or secondary school tuition, registered apprenticeship program expenses, or qualified education loan repayments as described in the Disclosure Booklet and Tuition Savings Agreement. State tax benefits for non-resident New York taxpayers may vary. Please consult your tax advisor about your particular situation.

³ Limitations may apply. Please review the Advisor-Guided Plan Disclosure Booklet for details.

⁴ No additional gifts can be made to the same beneficiary over a five-year period. If the donor does not survive the five years, a prorated portion of the gift is returned to the taxable estate.