Maryland 529 Plan Rules And College Savings Options

Maryland 529 Plans At A Glance

Maryland 529 Tax Deduction And Tax Rules

Maryland lets account holders and other contributors subtract up to $2,500 a year per beneficiary for contributions to the College Investment Plan, and each spouse on a joint return is treated separately, so a couple can subtract up to $5,000 per beneficiary if both contribute (Md. Code, Tax-General §10-208). Contributions above the limit carry over for up to 10 years, but you can't take the subtraction in a year the account holder received a Save4College state contribution. Our state-by-state 529 tax deduction table shows how that compares with neighboring states.

The same statute gives a separate $2,500 subtraction per contract for Prepaid College Trust payments and per beneficiary for Maryland ABLE contributions, each with its own carryover. Growth is tax-deferred and qualified withdrawals are free of Maryland tax, including withdrawals for an out-of-state college, which our list of qualified 529 plan expenses breaks down.

Maryland doesn't require money to stay in the College Investment Plan for any set period before you withdraw it. The subtraction covers contributions made during the tax year, and the only add-back is for distributions not used for qualified higher education expenses, with no holding period (Md. Code, Tax-General §10-205). That means Maryland families paying tuition out of pocket can route up to $2,500 per contributor through the plan first and still claim the subtraction, a move states like Wisconsin and Montana have blocked, as our breakdown of 529 plan churning and withdrawal limits explains.

Maryland itself hasn't settled the Roth rule. Federal law lets a 529 that's been open at least 15 years roll up to $35,000 into the beneficiary's Roth IRA, the plan offers a rollover form, and Savingforcollege lists a direct rollover that meets the federal requirements as a qualified Maryland distribution (Savingforcollege). Maryland's add-back still covers any distribution "not used" for qualified higher education expenses (Md. Code, Tax-General §10-205), and the Comptroller hasn't said how that applies to a Roth rollover. Read our 529-to-Roth IRA rollover rules and ask a tax preparer before you move leftover money.

Maryland defines qualified higher education expenses by reference to federal section 529 (Md. Code, Education §18-19A-01), but the plan's own FAQ still describes a $10,000 K-12 limit and warns that state tax treatment can include recapture (Maryland 529). Until the plan or the Comptroller updates its guidance, confirm before using the account for K-12, and see our breakdown of the 2026 529 plan expansion for the federal changes.

How Maryland's 529 Plan Ranks

Maryland ranks 11th of the 50 state plans in our best 529 plans rankings, which include Washington, D.C., with a 68.2% net return on investment. Our Net ROI score models $100 a month for 10 years at a 5% annual return, subtracts plan fees, and reinvests the value of the state tax break each year. Maryland's 8 basis point fee in our model is on the low end, and its 6.5% tax break keeps it just outside the top 10.

Don't read this table as a reason to switch plans. Each state's score assumes a taxpayer in that state using its own plan, so a Maryland resident who moves to Virginia's plan gives up the Maryland subtraction, which leaves them worse off. The ranking shows what a dollar is worth inside the Maryland plan compared with what families in other states get, and the full rankings table lists all 50 state plans.

The gap with the top of the list comes down to two levers Maryland controls. Indiana's 20% tax credit is what puts it at #1, and Maryland's $2,500 cap and fee keep it just outside the top 10, so a larger subtraction or lower fees would move Maryland families up. If that matters to you, share these numbers with your state legislators, and use our 529 plan tax deductions by state table to show how other states reward savers.

Should Maryland Residents Use The College Investment Plan?

Yes, for nearly every Maryland taxpayer. The subtraction only applies to Maryland's own plans (Md. Code, Tax-General §10-208), and a family that saves more than $2,500 per contributor in a year can use the excess over the next 10 years. Our 529 plan tax deductions by state table shows how that compares.

Lower- and middle-income families should also weigh Save4College, since a $500 state contribution can be worth more than a year's subtraction, even though taking it rules out the subtraction that year. Nonresidents can open the Maryland plan, since residency isn't required (Maryland 529), but they should first check where to open a 529 plan in their own state.

Four years at an in-state Maryland public university runs about $110,400 on campus, so the average College Investment Plan balance of about $30,900 covers a little more than one year. Our Maryland college costs and financial aid breakdown lists costs by school, and our 529 savings benchmarks by age show what to aim for.

Maryland 529 Plan Details

Maryland 529 runs both of the state's programs, and T. Rowe Price manages the College Investment Plan (Maryland 529). As of June 30, 2026, the two programs held $13.63 billion across 427,897 open accounts, and Maryland ranked 13th among the states in 529 assets (The 529 Network). Our 529 plan and college savings statistics show how that compares nationally.

Other Maryland College Savings Programs

Upromise. Upromise lets you earn money for your Maryland College Investment Plan account through rebates and rewards on everyday spending, and the Upromise credit card sends cash back straight into your child's 529 plan (Upromise). You can link a Maryland account to your Upromise profile, so the rewards stack on top of Maryland's state tax subtraction.

Save4College State Contribution Program. Maryland adds $500 to an account when the account holder's Maryland AGI is under $87,500 single or $125,000 joint, and $250 up to $112,500 single or $175,000 joint, if the holder contributes $25, $100, or $250 depending on income (Md. Code, Education §18-19A-04.1). The beneficiary must be under 26, each account holder can receive up to $9,000 over a lifetime, and 2026 applications closed May 31 (Maryland 529). Our Maryland financial aid page lists the state's college grants.

Maryland ABLE. People with disabilities can save in a Maryland ABLE account, and Maryland ABLE contributions get their own $2,500-per-beneficiary subtraction with a 10-year carryover (Md. Code, Tax-General §10-208). ABLE savings can protect eligibility for SSI and Medicaid, which our 529 plan overview compares with regular college savings.

Leftover money. Families with money left after college can change the beneficiary to a sibling, pay down up to $10,000 of student loans, or roll to a Roth IRA, keeping Maryland's add-back rule in mind. Our list of what to do with leftover 529 money covers each option, and Maryland graduates in teaching or health care should also check Maryland student loan forgiveness programs.

Frequently Asked Questions

Related Maryland Resources

How We Sourced This Data

Plan details on this page come from the plan and the state: Maryland 529's website, FAQs, investment options, and Save4College pages, The 529 Network 529 plan data as of June 30, 2026, and Savingforcollege's Maryland College Investment Plan profile for fees, portfolio counts, fund families, and its summary of Maryland rollover treatment. Tax and program rules come from the Annotated Code of Maryland, Tax-General §§10-205 and 10-208 and Education §§18-19A-01 and 18-19A-04.1. The college cost figure comes from our Maryland financial aid page, which draws on institutional cost pages and NCES IPEDS data. Read more about how we fact-check and update content.

Page refreshed annually in September, after the Maryland College Investment Plan publishes its updated fee schedule, and reviewed in January for tax season. Last full refresh: September 24, 2026.