Maryland College Investment Plan - Tax Benefits

Maryland Tax Benefits

Any earnings are tax-free when used toward eligible college expenses.

Each account holder can deduct up to $2,500 of contributions each year from Maryland income per beneficiary—$5,000 for two, $7,500 for three, etc. Contributions in excess of $2,500 can be deducted for up to the next 10 years. Contributions in following years could be eligible for deduction; however, you cannot deduct more than $2,500 per beneficiary in any year or extend the 10-year limit on each year’s contribution.

While the ability to enjoy tax deferred growth and tax free distributions (as long as the funds are used for eligible college expenses) are inclusive to all 529 plans, the ability to qualify for a Maryland State income deduction on contributions is available only with the College Savings Plans of Maryland.  Additionally, the availability of the Maryland income deduction is conditioned on the contributor being the account holder and a Maryland taxpayer.

Federal Tax Benefits

Any earnings are federally tax-free when used toward eligible college expenses.