How to Roll Over Funds from Another 529 Plan

Rollovers to the Maryland College Investment Plan are accepted from other qualified 529 plans, including the Maryland Prepaid College Trust.

1. Before you initiate the rollover process, we recommend contacting the current 529 provider/manager to verify the funds are eligible for a rollover to the Maryland College Investment Plan and what their requirements are for processing a rollover.

2. Once you have confirmed your funds are eligible for a rollover:

Open your Maryland College Investment Plan Account

Complete the Rollover Form

Mail the completed Rollover Form to the address listed on the form. Your rollover should be processed and completed within a few weeks.

What You Need to Know

Account Holder

The Account Holder on the College Investment Plan Account must be the same as the Account Holder on the account that is being rolled over.

Beneficiary

IRS regulations allow only one rollover per Beneficiary during a rolling 12-month period without tax implications.

If the Beneficiary changes, there is no limit on rollovers between 529 plans. You can rollover funds between 529 plans any time for a different beneficiary as long as that Beneficiary is a member of the previous Beneficiary’s family*.

Tax Considerations

A Maryland taxpayer who rolls over funds from another 529 plan is eligible for a unique Maryland State income deduction of up to $2,500 per Beneficiary per year by an individual, and up to $5,000 per Beneficiary per year by married taxpayers filing jointly with a 10-year carryforward of excess contributions.

Rollover contributions received from another qualified 529 plans are considered contributions in the tax year it is received. The total amount of the rollover contribution is eligible for the Maryland State income deduction, including any earnings. Rollover contributions are deductible if not previously deducted.

A rollover to the College Investment Plan from another 529 plan must include documentation showing the portion that is principal and the portion that is earnings, if any. If the College Investment Plan does not receive this documentation, it is required to record the rollover as all earnings.

Non-Maryland taxpayers and residents should determine (1) whether the state where they or their Beneficiary pay taxes offers a 529 plan that provides tax benefits not available by investing in the College Investment Plan, and (2) the consequences of rolling funds over from that state’s 529 plan to the College Investment Plan. You should check with your tax professional regarding your specific situation.

Maryland College Investment Plan

Roll Over to the Maryland College Investment Plan

Current Maryland Prepaid College Trust Account Holders

If you are a current Maryland Prepaid College Trust Account Holder, please refer to this page for more information, including FAQs on requesting a rollover.

IMPORTANT NOTE: If your Beneficiary has more than one Maryland Prepaid Trust Account, and you are rolling both Accounts to the Maryland College Investment Plan, you must submit a separate rollover form for each Account you are rolling over in the same day. This will ensure they are processed at one time as not to exceed the maximum of one rollover in a 12-month period for the Beneficiary.

*

Maryland 529 cannot and does not provide tax advice. Please check with your tax professional regarding your specific situation.

 

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.