Maryland 529 Plans

Maryland offers two 529 college savings plans, a direct-sold plan called Maryland College Investment Plan, and a pre-paid tuition plan called Maryland Prepaid College Trust.

Maryland College Investment Plan

Maryland College Investment Plan is a traditional 529 plan that allows you to invest money today and reap tax benefits when you withdraw it to pay for qualified education expenses.  It was named one of hte top five 529 college savings plans by Morningstar.

Type:  Direct – this Maryland 529 plan can be purchased directly from the state.

Fund Family: T. Rowe Price

Minimums:  To get started you can deposit $250 or just $25 if you choose to use the automatic monthly plan.  The minimum subsequent contribution is $25.

Maximum Contributions:  Currently, you can contribute up to $320,000 to your Maryland 529 plan.  Of course, your total amount in the plan can be higher as your investments group.  529 plans typically increase the contribution limit over time, so you may be able to contribute more.

Tax Benefits:  Good news for Maryland residents - by investing in your state's 529 plan, you can deduct up to $2,500 on your state income taxes for single filer and $5,000 for married filers per beneficiary.  You also get federal income tax benefits as you do not pay income tax on your earnings.  Out-of-state participants still get the federal tax benefits.

Residency:  The Maryland College Investment Plan is open to all United States residents, not just those in Maryland

You can learn more about this Maryland 529 plan at the official website http://www.collegesavingsmd.org/college-investment-plan-overview.aspx.

Maryland Prepaid College Trust

Maryland also offers a pre-paid tuition plan that lets you lock in today's rates for college.   It can be used at any qualified institution of higher education, public or private, anywhere in the country.  However, private and out-of-state college expenses will be prorated and may not be fully covered.  It is open to Maryland and Washington D.C. residents.

For more information about Maryland Prepaid College Trust visit the official website http://www.collegesavingsmd.org/prepaid-college-trust-overview.aspx.