Maryland 529 Plan: What College Savers Should Know
Credit: Image Credit: Tony Chen / 500px / Getty ImagesIn September 2023, according to the Federal Reserve, Maryland held about $9.8 billion in 529 accounts. That includes $8.6 billion in 529 college savings accounts and $1.2 billion in prepaid tuition accounts.[1]
529 plans are state-sponsored savings accounts specially designed to save for college. Maryland residents can also take advantage of a tax deduction when they save for college in the state’s 529 program.
Keep reading for details about Maryland’s 529 college savings account and tax deduction rules for state residents.
Maryland 529 Plans
Maryland offers one 529 college savings plan. It used to also offer a prepaid college trust. But, as of June 2023, Maryland’s prepaid plan is no longer accepting new enrollments.
Maryland Senator Edward J. Kasemeyer College Investment Plan
- Requires State Residency? No
- K-12 Expenses Eligible? Yes
- Fees: 0.13-0.64%
- Performance Notes: As of October 2023, the 2024 portfolio had gained 6.47% in average annual returns since its creation.
Maryland’s 529 prepaid college trust is designed for Maryland public schools. But, your beneficiary can use the money to pay for tuition at other colleges nationwide.
If your beneficiary gets a scholarship, you can use money from the prepaid trust to pay for other college expenses, like room and board, or hang on to it for grad school.
Maryland 529 Tax Deduction
According to the College Savings Plan Network:[2]
- Single state residents can deduct annual contributions to the Maryland 529 on their taxes — up to $2,500.
- Married state residents who file jointly can deduct up to $5,000.
In Maryland, you can contribute up to $500,000 in total to college savings plans.