Whether you’re saving for your child’s college tuition or pinching pennies to accommodate a new private school, the state of Maryland now makes it easier than ever to manage tuition costs. 529 plans, implemented by some states for more than two decades, have helped parents cover school expenses for their college-aged children. Now, a new law has expanded the 529 college savings program to include investments for K-12 private school tuition. Learn more about 529 accounts in Maryland, and discover how you can benefit.
What is the 529 Plan?
The 529 plan is a tuition savings program that is exempt from federal taxes. First introduced in 1996, the accounts were advertised to parents and beneficiaries as a way to save money for college and higher learning expenses. Following the comprehensive tax reform bill passed in late December, the state of Maryland now authorizes an additional incentive on a state tax deduction on funds invested in 529 accounts and specifically used for K-12 private school tuition.
How Much Will I Save?
Couples that file a joint tax return may receive a tax deduction of up to $5,000 per child on their state tax return when they contribute equal or more of that amount to their child’s 529 accounts. A $5,000 tax deduction equals a tax savings of approximately $400.
529 plans aren’t restricted to the parents. Grandparents and other non-family members can also contribute to the account. Anyone can contribute, but only $10,000 per child may be withdrawn for day school tuition per year.
Where Can I Open a 529 Account in Maryland?
Visit www.Maryland529.com and select “Maryland College Investment Plan” to enroll and learn more!
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