Grandparents: Give the Gift of Education
Grandparents dream of seeing their grandchildren succeed, and leaving a legacy with a 529 plan is a great way to invest in their future. You can open a flexible Maryland College Investment Plan account and remain directly in control of the assets or add funds to your grandchild’s existing account through gift contributions. When the time comes, your grandchild can use the funds both in and out of the State for qualified education expenses.
Already familiar with the Maryland College Investment Plan?
T. Rowe Price Insights
Leaving a Legacy With 529 Plans: A Great Path for Grandparents
Contributing to your grandchild’s education can be a valuable contribution to your family’s future, both by improving your grandchild’s future earning potential and by helping to relieve a key worry for your adult children. A 529 plan offers unique benefits, and the flexibility to repurpose funds if your grandchild does not end up needing them. Roger Young, CFP®, T. Rowe Price thought leadership director, provides insight on how contributions to 529 plans can also play a useful role in estate planning for older generations.
Learn MoreWHY THE MARYLAND college investment plan?
Why Save with the College Investment Plan?
Your grandchild has big dreams about a future where they can be anything they want to be. A Maryland College Investment Plan account is flexible to help them pursue those dreams.
- Flexibility—Open an account at anytime. Choose how much and how often you want to invest based on your budget and goals.
- Tax Benefits—Earnings are Maryland and federally tax-free1 when used for qualified education expenses. Contributions may be eligible for a State income subtraction of up to $2,500 per beneficiary each year for Maryland tax payers.
- Freedom—Choose from a variety of investment options according to your investment comfort level.
- Gifting—Invite friends and family to be a part of your savings journey by gifting with a Ugift® code that links directly to your grandchild's account.
- Savings Boost—You could be eligible to receive a $250 or $500 contribution from the State of Maryland through the Save4College State Contribution Program.2
GIVE A GIFT
Help Them Save for Their Education
If your grandchild already has a Maryland College Investment Plan account, it’s easy to securely give a gift. Remember, a contribution today could mean less they have to borrow in the future.
Conveniently send a gift by mail or secure electronic transfer using a unique Ugift code. All funds will go directly into your grandchild’s College Investment Plan account.
For 2025, the annual exclusion for gifts is $19,000 per individual per year without paying gift taxes. With a 529, you can contribute up to $95,000 (or $190,000 for a married couple) to a beneficiary in one year and average the gift over five years without paying gift taxes.3 Future years may differ.
How to Contribute a GiftBENEFITS FOR GRANDPARENTS
Estate Planning, Gifting, and State Income Tax Benefits
A 529 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 owner.
When you contribute to your grandchild’s account, the contributions are (with some exceptions) removed from your taxable estate and considered a gift to the grandchild. For 2025, each grandparent can take advantage of the annual gift tax exclusion of $19,000 (per recipient, per year) to contribute annually to a grandchild's 529 account.
Contributions may also qualify for special five-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.3 The ability to use gift tax averaging means it’s possible to “superfund” a grandchild’s 529 account with a one-time deposit of up to $95,000 per child in 2025 (or $190,000 if you are a married couple) without incurring gift taxes, provided that additional gifts are not made to the grandchild during the five-year period following the deposit.
If you are still earning Maryland taxable income, you can receive a maximum $2,500 income subtraction from your State adjusted gross income annually per beneficiary for contributions to any Maryland College Investment Plan account. Click here to learn more.
New: Starting in the 2024–2025 school year, distributions from a grandparent-owned 529 account will no longer count as income to the student on the Free Application for Federal Student Aid (FAFSA). In most cases, funding a grandchild’s education through your own 529 account will no longer have any bearing on their eligibility for financial aid that is based on the FAFSA.
Learn More About SuperfundingOPENING YOUR OWN ACCOUNT
How to Open a Maryland College Investment Plan Account
Opening your own Investment Plan account can ensure that you retain control of the savings and how the account is used. In addition, you can name an account owner successor to help determine who will assume control of the account in the future.
Saving for your grandchild’s future education has never been easier.
Open a College Investment Plan Account
Save for your grandchild's future education today with the Maryland College Investment Plan managed by T. Rowe Price, an investment management firm with more than 80 years experience.
Choose an Investment Option
We offer a variety of investment options whether you are new to investing or prefer a hands-on approach.
Contribute All at Once or Save Regularly
Once you open an account, you can tailor your contributions to your current budget. It's easy to save with one time contributions or recurring contributions with the option of increasing over time.
Recurring Contributions1 There may be tax implications for Maryland taxpayers who take a distribution for the education loan of a sibling of the beneficiary. Maryland 529 cannot and does not provide tax advice. Your tax consequences depend on your individual circumstances. If you withdraw funds that are not used for qualified education expenses, any earnings on that distribution may be subject to income taxes and a 10% federal penalty. In addition, there may be Maryland tax consequences for your contributions. State tax laws and treatment may vary. Check with a tax professional regarding your specific situation.
2 If you are not eligible to apply for the Save4College State Contribution Program, you may still be eligible for an income subtraction from your Maryland taxable income up to $2,500 per year, per beneficiary, for contributions made to a Maryland College Investment Plan account. You should check with your tax professional regarding your specific situation. If you receive a State contribution for any account in a given year, you are NOT eligible to receive the income subtraction on your State taxes for contributions that you made to that or any other Maryland College Investment Plan account for that year.
3 Gift and estate tax issues can be complex; see a tax professional to discuss your situation in detail. Please note that the availability of tax or other benefits may be conditioned on meeting certain requirements such as residency, purpose for or timing of distributions, or other factors, as applicable. Earnings on a distribution not used for qualified expenses may be subject to income taxes and a 10% federal penalty. State tax laws and treatment may vary. Please check with your state or a tax professional regarding the specific tax rules for your state.
