Maryland 529 College Savings PlansMaryland offers two 529 plans to save for college education. The first allows you to lock in tomorrow's college at today's prices. The other offers you a chance to invest your money tax-deferred to be ready when it's time for college.
Maryland College Investment PlanThis plan allows you to invest in several different options managed by T. Rowe Price. An account can be opened with as little as $25 per month. If the account holder is a Maryland resident, they can deduct up to $2,500 per beneficiary from their Maryland adjusted gross income. Money used for approved educational expenses will be free from Federal taxes, as well.
Maryland Prepaid College Trust (MPCT)With the cost of a college education rising yearly, it's good to have a program that will allow you to lock in your future college costs today. You can buy a semester or one to five years at a university, up to two years at a community college or even buy two years community and two years university.
The money can be used at any Maryland school or even used at eligible colleges nationwide. If you choose to use your funds at an out-of-state school, the program will allow you the weighted average cost of Maryland public college that year.
There are several ways to fund the program, including a lump sum payment, annual payments, monthly payments spread over 5 years or even extended monthly payments ending in July of the year the college should be commencing.
If the account holder is a Maryland resident, they can deduct up to $2,500 per beneficiary from their Maryland adjusted gross income. Money used for approved educational expenses will be free from Federal taxes, as well. When the account is opened, either the account holder or the beneficiary must reside either in Maryland or Washington, D.C. You should also check with a financial advisor and tax advisor to see if a 529 investment is right for you.