Maryland College Investment Plan Account Holder FAQs
Funding your Account.
Q: How can I contribute to my account?
Contributions can be made by check, money order, automatic monthly contributions from your bank account or payroll deduction from a participating employer. Keep in mind that the minimum amount required to open an account is $250, or you can contribute as little as $25 with automatic monthly contributions to open an account. The minimum for additional purchases into an existing account is $25.
Q: How can I change the amount of my automatic monthly contributions?
You can sign up for Automatic Monthly Contributions or make changes to your existing Automatic Monthly Contributions at any time by logging in to your account at www.CollegeSavingsMD.org. To access your account click on “Take me to my account”. Additionally, changes can be requested over the phone by calling 888.4MD.GRAD (463.4723) and speaking with a service representative. Changes can also be submitted in writing by sending either the Account Services form or a letter of instruction.
Q: What is the maximum that I can contribute to my account?
The maximum that can be invested for a student (regardless of number of accounts or Account Holders) cannot exceed $320,000. The account balance may grow above $320,000 due to earnings, but no additional contributions can be made at that point.
Q: Can I rollover funds from another 529 plan?
Yes, rollovers from another Qualified Tuition Program to the College Investment Program are allowed. For each Beneficiary, rollovers are restricted to once per 12-month period.
Maintaining My Account
Q: How can I access my account online?
To access your account online, visit www.CollegeSavingsMD.org and click on “Take me to my account”.
Q: How can I check the balance in my Account?
To check your account balance, visit www.CollegeSavingsMD.org and click on “Take me to my account”. Once you log in you will be able to view your balance as well as historical transactions. Additionally, balance information can be requested over the phone by calling 888.4MD.GRAD (463.4723).
Q: How can I move funds from one investment portfolio to another?
You may change your Investment Options once per calendar year, per Beneficiary. If you have multiple Investment Options for a Beneficiary, all changes for that Beneficiary must be requested on the same day. This can be done in writing using the Investment Exchange Form or you can simply call 888.4MD.GRAD (463.4723) to request this over the phone. For more information on making changes to your Account, see Maintaining Your Account (Disclosure Statement PDF) starting on page 15.
Q: How can I track the investment performance of my Account?
Performance and pricing information is available on the portfolios every business day. It can be obtained from www.CollegeSavingsMD.org by highlighting the “College Investment Plan” tab, then the drop down choice “Investment Performance”.
Q: How does the State income deduction work for the College Investment Plan?
Currently, Maryland taxpayers receive a maximum $2,500 deduction from their State adjusted gross income annually per Beneficiary for contributions to the College Investment Plan. The Account Holder is the only person who can take advantage of the Maryland State income deduction for contributions he or she has made. Contributions made in excess of $2,500 per Beneficiary in a single year may be carried forward and deducted from your State adjusted gross income for up to 10 additional years. The following example helps to illustrate how this deduction applies:
- If you contribute $27,500 in Year 1 to an Account (or into more than one Account) for your daughter, you can deduct $2,500 per tax year for each of Years 1 through 11 (11 x $2,500 = $27,500). If you also contribute $27,500 in Year 1 to an Account (or into more than one Account) for your son, you can deduct an additional $2,500 per tax year for each of Years 1 through 11, for a total deduction of $5,000 per tax year from State adjusted gross income.
- For additional information on College Investment Plan tax benefits for Maryland taxpayers, please refer to Maryland Income Tax Administrative Release No. 32, which can be obtained at www.marylandtaxes.com or by calling 1-800-MD-TAXES.
- To take advantage of this income deduction for a particular year, your contribution must be postmarked by December 31st of that year.
- If you move out of the State and/or no longer pay Maryland income tax, you will no longer receive the Maryland State income deduction. You should check with your new state of residence regarding the state tax benefits, if any, available for your 529 plan investment.
Q: How may I claim a Maryland State income deduction for my payments to the College Investment Plan?
For additional information on College Investment Plan tax benefits for Maryland taxpayers, please refer to Maryland Income Tax Administrative Release No. 32, which can be obtained at www.marylandtaxes.com or by calling 1-800-MD-TAXES.
Distributions from Your Account
Q: How can I remove funds from my Account?
You can request a distribution at anytime from the College Investment Plan by completing a Distribution Form available online or over the phone. You can also request a distribution over the phone by calling 888.4MD.GRAD (463.4723).
Q: How are distributions paid and to whom?
The Distribution Form will outline numerous payment options for how distribution checks can be sent. Checks can be made payable to the Account Holder, Beneficiary, Beneficiary and Eligible Educational Institution jointly, or Estate of the Beneficiary.
Q: How can I start to make automatic monthly contributions to my Account?
If you are establishing a new account, there will be an option to add an automatic monthly contribution to your account during the open an account process. This process can be done either using the Online Enrollment service or with a New Account Enrollment Form. During Online Enrollment you will be asked to enter your bank information if you would like to add this service. When using the New Account Enrollment Form, section 5 will ask if you wish to add an automatic investment to the new account. This step will require you to include a voided check or account deposit slip in order to add your bank information.
If you have an existing account you can complete an Account Services Form or mail a letter of instruction. If new bank information is being added, a blank voided check or savings deposit slip will need to be included to add the bank to your College Investment Plan account.
Q: How can I report a change of address?
There are numerous methods you can use to update the address on your account. The first method utilizes the online system allowing you to update your own address when logged in to your account on www.CollegeSavingsMD.org. Secondly, if prefer, you may mail in the Account Maintenance Form or a letter of instruction to request this update. Additionally, your address can be easily updated over the phone by calling a service representative at 888.4MD.GRAD (463.4723).
Q: How can I change the Beneficiary on my account?
You can change the Beneficiary on your account by completing the Beneficiary/Portfolio Change Form which is available online in the “current customer” tab of our web site. You can also request one by mail from a phone representative by calling 888.4MD.GRAD (463.4723).
Q: How can I change the Account Holder on my account?
Similar to changing a Beneficiary, this can also be accomplished with the Account Holder Change Form available on our website. Along with this form, the new Account Holder may be required to submit a New Account Enrollment Form if the new Account Holder does not already have an account in the College Investment Plan. You can also request one by mail from a phone representative by calling 888.4MD.GRAD (463.4723).
Account Termination or Transfer
Q: How can I close my account?
You can close your account by having all of the assets distributed. Keep in mind that if the funds are distributed as a Non-Qualified distribution, they may be subject to ordinary income tax, as well as a Distribution Tax. If all assets are moved due to a change in the Beneficiary of your account, we will close your original account and open a new one. You must be the Account Holder of the new account. You should check with your tax advisor regarding the tax consequences of closing your account.
Q: How can I transfer my account to another 529 plan?
Indirect rollovers can be completed through the College Investment Plan by requesting a distribution. To qualify as a rollover distribution, the amount distributed from your account must be reinvested into another Qualified Tuition Program within 60 days of the distribution date. Direct rollovers are initiated by the receiving institution. In order to request a direct rollover, you should contact the institution which will be receiving the funds.
Q: Can my spouse call your office to obtain information about my account?
No, to protect your privacy account information is generally provided only to the Account Holder or Custodian. However, you may direct, in writing that someone other than you may request or receive information regarding your Account.
Q: What are the fees associated with the College Investment Plan?
The College Investment Plan has no commissions, loads, sales charges, or enrollment fees. There is an Annual Account Fee of $20, which may be waived in certain circumstances. There is also a Program Fee and fees associated with the Funds. A detailed description of Fees associated with the Maryland College Investment Plan can be found in the section titled Fees and Costs (Disclosure Statement PDF) starting on page 2.
Q: Is my Account protected from creditors?
Under Maryland law, your account is not subject to attachment, garnishment, or seizure by creditors of you or the Beneficiary. Federal law also provides limited creditor protections based on the timing of the contributions and the debtor’s relationship to the Beneficiary. Generally, contributions made to a debtor’s account less than one year before the filing of a bankruptcy petition are included in the debtor Account Holder’s bankruptcy estate and are not protected from creditors. Contributions made to a debtor’s account more than one year before the filing of a bankruptcy petition are generally not part of a debtor Account Holder’s bankruptcy estate, provided that the contributions are not deemed excess contributions and the Beneficiary is the debtor’s child, stepchild, grandchild or stepgrandchild. However, for contributions made between one and two years prior to the filing of bankruptcy petition, a maximum of $5,000 in contributions may be excluded from the debtor Account Holder’s bankruptcy estate. You should consult a legal advisor regarding the application of this specific law to your particular circumstances and for a determination of whether Maryland or federal law applies to your situation.
Q: How does my participation in the College Investment Plan affect my ability to receive financial aid?
A Beneficiary may wish to participate in federal, state, or institutional loan, grant, or other programs for funding higher education. An investment in the College Investment Plan may or may not have an adverse impact on the Beneficiary’s eligibility to participate in need-based financial aid programs.
Assets in the College Investment Plan or another 529 plan are typically be included on the Free Application for Federal Student Aid (FAFSA) form as a parental asset, which is assessed at a lower rate than a student’s asset would be when determining a family’s expected contribution. Specifically, College Investment Plan accounts are to be reported on the FAFSA using the Account Value, which is available for all current Accounts by accessing your Account(s) online in the Account Summary Section.
Since the treatment of Account assets under any such program may have a material effect on your Beneficiary’s eligibility to receive valuable benefits under financial aid programs, you or your Beneficiary will need to check the applicable laws or regulations or check with the financial aid office of an Eligible Institution and/or your tax advisor regarding the impact of an investment in the Prepaid College Trust on need-based financial aid programs.
Q: What happens if my Beneficiary decides not to attend college?
You may name a new Beneficiary as described in the Changing a Beneficiary, Transferring Assets to Another of Your Accounts section of the College Investment Plan Disclosure Statement (page 15). If you do not wish to name a new Beneficiary, you may take a distribution of your Account assets. In this case, the IRS may treat your distribution as Non-Qualified distribution, subject to applicable taxes and penalties.
Q: Does the College Investment Plan send me an Account Statement?
You will receive quarterly statements from the College Savings Plans of Maryland.
Q: Our family is expecting a newborn. When can our newborn be enrolled in the College Investment Plan?
A newborn may be enrolled at any time. You may also open an Account naming yourself as the Beneficiary in anticipation of the birth or adoption of a new child. The Beneficiary can be easily changed at a later date.