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Maryland 529 -- Prepaid College Trust logo

Maryland 529 -- Prepaid College Trust

The Maryland 529 -- Prepaid College Trust offers a variety of tuition packages to Maryland and District of Columbia families.

Our Ratingx

Fee Scorex

5 of 5

Performancex

N/A

  • Program typePrepaid contract
  • Enrollment periodDecember 1, 2018 through May 31, 2019. Year round for newborns.
  • Inception1998
  • State agency
    Maryland 529
  • Tax deduction
    Tax deduction for single filers $2,500/yr
    Tax deduction for joint filers $5,000/yr
  • Program Manager
    College Savings Plans of Maryland Board

Ratings & Rankings

Our overall rating for MD residents

This is an excellent program with many benefits for the participant and positive investment attributes. If it has any significant weaknesses then it also has some particularly good things to recommend it.

Our overall rating for non-residents

This program is not open to you either because it has residency requirements or because it has stopped accepting new enrollments.

Savingforcollege.com's 5-Cap Ratings provides an evaluation and comparison of 529 plans, utilizing a formula that examines dozens of factors grouped into the following categories.

Financial Benefits

4.00

Features

3.50

Safety

5.00

Reliability

5.00

Eligibility

State residency requirements:

The account holder or beneficiary must be a Maryland or District of Columbia resident at the time of program enrollment.

Who can be a participant/owner in the program?

U.S. citizens and resident aliens, UGMA/UTMA custodians, and legal entities organized in the U.S.

Significant time or age restrictions imposed by the program:

Beneficiaries must be in the 12th grade or younger at the time of program enrollment and must be enrolled for at least 3 years before they are eligible to receive tuition benefits. Benefits must start to be used within 10 years after the beneficiary's projected date of high school graduation, not including years spent in the U.S. military.

Contributions

Minimum contributions:

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Contractual Features

Contract prices:

Prices for contracts purchased during the 2018-19 enrollment period range from as little as $5,099 for a one-year community college contract for a newborn to as much as $49,226 for a four-year university contract for a child in the ninth through twelfth grades.

Available tuition packages:

One semester to four years at a Maryland public 4-year university, one or two years at a Maryland community college or a community/university combination (2 years of each).

Benefits for beneficiary attending private or out-of-state institution:

The plan will pay the actual tuition up to either the weighted average tuition in the Prepaid College Trust plan purchased or the minimum benefit, whichever is greater. If the beneficiary receives a scholarship, grant, or tuition remission, the plan will pay any remaining tuition up to the scheduled benefit.

Contract payment options:

Lump sum, annual, monthly, and extended monthly installments with a downpayment option. The first payment for contracts purchased during the 2018-19 enrollment is due August 1, 2019.

Are program benefits backed by the full faith and credit of the state?

No

Are program benefits collateralized or guaranteed in any other way?

Yes, the legislature is required to consider, but not necessarily approve, an appropriation to cover any shortfall, repayable within two years.

Fees & Expenses

Enrollment or application fee:

$75 paper application or $50 with online application, reduced to $20 when purchasing additional years of tuition for the same beneficiary or enrolling a beneficiary with an account in the Maryland College Investment Plan.

Taxes and other Benefits

  • Tax deduction for single filers$2,500/yr
  • Tax deduction for joint filers$5,000/yr

Example

Married filing jointly residents contributing $100/month can expect an additional $0 a year in tax savings.

Program match on contributions:

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State tax deduction or credit for contributions:

Contributions to the Maryland 529 -- Prepaid College Trust of up to $2,500 per account per year are deductible in computing Maryland taxable income, with an unlimited carryforward of excess contributions. Account owners and contributors are eligible for the deduction. Rollover contributions are deductible if not previously deducted. Contribution deadline is December 31 postmark.

State tax recapture provisions:

The principal portion of nonqualified withdrawals from this plan are included in Maryland taxable income to the extent of prior Maryland tax deductions. Rollovers are not subject to recapture.

State tax treatment of qualified distributions:

Qualified distributions from Maryland and non-Maryland 529 plans are exempt.

State tax treatment of rollovers:

Maryland follows federal tax-free treatment.

Does the sponsoring state exclude the value of an account for state financial aid purposes?

No

Does participation in the program provide beneficiaries with any advantages in qualifying for resident tuition status at state institutions?

No

Does the program have a formal agreement with a rewards program or outside scholarship program?

Yes, the Upromise Rewards program can be linked to any 529 college savings plan. Upromise Rewards is free to join and offers members cash back for college.

Upromise Helps Families Save for College

Upromise Helps Families Save for College

Statutory protection of an account from creditors:

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Want to Boost your Savings?

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Distributions & Terminations

To whom are distributions made payable:

Eligible educational institution or account owner, as directed by the account owner.

Account Changes

Policy regarding participant/owner changes:

Accepts requests to transfer contract ownership ($10 fee).

Contact

Website:

http://www.collegesavingsmd.org/college-savings-plans-of-maryland/maryland-prepaid-college-trust

Telephone:

1-888-463-4723