The Grandparents' Guide to the Maryland College Investment Plan

Grandparents dream of seeing their grandchildren succeed, and a college education is a great place to start. The Maryland College Investment Plan provides flexibility—your grandchild can use the plan both in and out of the state when the time comes.


Unique Tax Benefits

Did you know you that you may be eligible for federal and State tax benefits when you contribute to a Maryland 529 Account?

Any earnings are federally and State tax-free when used to pay for qualified education expenses. And, if you have Maryland taxable income, you can receive a maximum $2,500 subtraction from your State adjusted gross income annually for contributions, per Maryland College Investment Plan Beneficiary and/or existing Maryland Prepaid College Trust Account*.

Maximizing your State taxable income subtraction

As of June 1, 2023, the Maryland Prepaid College Trust is no longer accepting new enrollments.


Give a Gift

Education is a gift that your grandchild will never outgrow. If your grandchild already has a Maryland Prepaid College Trust* or Maryland College Investment Plan Account, it's easy to make a gift contribution to their Account.

Contributing today, could mean less they have to borrow tomorrow.

It’s easy and hassle-free.

You may be eligible for a gift tax exclusion and a Maryland income deduction.


Open a Maryland College Investment Plan

Help your grandchildren achieve their dreams by helping to fund their future education. Opening your own College Investment Plan Account can also ensure that you retain control of the savings and how the Account is used. In addition, you can name an Account Holder Successor to help determine who will assume control of the Account in the future.


Gift Tax and Estate Benefits

A 529 college savings plan allows you to complete a gift for purposes of the federal gift tax exclusion while remaining in control of the assets as the account holder. Contributions may also qualify for special 5-year averaging of the contribution, allowing a larger lump sum to qualify for the gift tax exclusion over that time if the proper election is made.

For example: For the 2023 tax year, if the amounts contributed by you for your beneficiary’s 529 account, together with any other gifts to that person (over and above those made to your account) do not exceed $17,000 ($34,000 for married couples making a proper election), no gift tax will be imposed for the year. Because you are permitted to average your 529 contributions over five years, gifts for a beneficiary of up to $85,000 can be made in 2023 ($170,000 for married couples making a proper election) and averaged out over five years for the gift tax exclusion. The ability to average a $85,000 gift over five years is a benefit that is unique to 529 plans.

This allows you to efficiently move assets over and above the $17,000 gift-tax exclusion limit into a tax-deferred investment.

However, you should read the Federal Tax Considerations in the MCIP Plan Disclosure Statement for further important information. In addition, you should consider consulting with a tax and estate-planning professional before investing.

The availability of tax benefits may be conditioned on meeting certain requirements, such as residency, purpose for or timing of distributions, or other factors as applicable. Please consult with a tax professional regarding your specific situation.