14 FEBRUARY 8, 2018 RIDGEWOOD TIMES WWW.QNS.COM
New tax provision helps pay private school tuition
BY RYAN KELLEY
RKELLEY@RIDGEWOODTIMES.COM
TWITTER @R_KELLEY6
At a time when two Queens Catholic
schools have announced
that declining enrollment will
force them to close in 2018, a provision
in the new federal tax law has the potential
to change things for the better.
Signed into law on Dec. 22, 2017, the
tax reform bill included a late amendment
that allows 529 plan savings to
also be used for private/religious K-12
education. The 529 accounts used to be
designated for college savings and are
state-sponsored, managed by investment
companies and allowed to gain
tax-free interest. Account owners can
now withdraw up to $10,000 per year
for each benefi ciary for elementary
and secondary education costs at private
schools.
According to Paul Kerzner, president
of the Ridgewood Property Owners
and Civic Association and longtime
advocate for the St. Matthias Catholic
Academy in Ridgewood, the provision
is a "great expansion for the original
intent of the program." He added that
it could even help prevent the impending
closure of St. Pancras if the school
is able to spread the word.
"You could get a hundred new students
to the school, so I would at least
try it," Kerzner said.
Since the 529 plans are ultimately
governed by each state, many of them
include a deduction on state income
taxes to encourage more families to
create an account.
Gregory Haufe, the treasurer of
the St. Matthias Catholic Academy
board, said that while he hasn't had the
chance to fully understand all of the
new provision's details, it appears to
be a step in the right direction. Haufe
said that he plans to hold a meeting
with parents to discuss the 529 plan
changes next month.
"One thing I can say is that I'm surprised
more people haven't jumped on
it yet," Haufe said.
A report from NPR explains some
possible drawbacks of the changes. If it
results in a signifi cant increase in the
number of people with 529 accounts,
that likely means the state would lose
money because of the tax deductions,
the report describes. That could then
lead to the state amending its own tax
laws to prevent such a loss.
There is also the possibility that
families will no longer use the 529 accounts
for their original intended purpose,
which is to let money grow long
term. Instead, they may be inclined to
simply put money in and withdraw it a
month later to sidestep the state taxes.
Either way, the account holders seem
to be the main benefi ciaries of the new
provision.
Salvatore Candela of the Tax Advocate
Group in Middle Village said that
he would be surprised if New York
Photo via Facebook/Futures in Education
changed its tax laws in response to
the federal changes. He has also been
advising his clients to maintain their
current 529 accounts for college savings
and open a second 529 if they wish
to take advantage of the new provision.
"I don't see the governor doing anything
to hurt trying to pay for private
schools; it would take me aback if
that happened," Candela said. "The
only drawback I can think of is people
taking money that was originally
intended for college."
Ultimately, experts do not believe
that the provision will infl uence more
public school students to transfer to
private schools.
Ridgewood Property Owners installed for duty
Councilman Robert Holden had the honor of swearing in the executive members and board of directors of the Ridgewood Property Owners and Civic
Association on Feb. 1 at the Ridgewood Presbyterian Church. Councilman Holden also introduced himself to the attendees and told them about his
experiences in his fi rst month in offi ce and his newly hired staff , as well as items on his agenda including the congestion pricing plan, “pay as you
throw” waste disposal proposal, public transportation issues and more.
Photo by Ryan Kelley/RIDGEWOOD TIMES
