Calling to those with a MD 529 Prepaid Savings Plan...

Temp614258375007293

Our 1st baby isn't due until June, so I'm still in the researching phase of figuring out what 529 plan we're going with.  I found a great website to compare all 529s, but since we live in MD figured I'd start by looking at that one due to the tax savings.  There's a number of things that make this attractive, but on page 9 of their enrollment kit it says "Any earnings are Maryland tax-free when used toward eligible college expenses. Each account holder can also deduct up to $2,500 of payments each year from Maryland income per account?$5,000 for two, $7,500 for three, etc. Payments in excess of $2,500 per account can be deducted in future years until the full amount of payments has been deducted."

 Does this mean that we'd get back all of the money we put toward the baby's college? So essentially, DD would go to college FOR FREE??? This sounds too good to be true... someone that knows better, please let me know- haha quickly before my soaring hopes get up TOO high!! TIA!

BirdGirl01

Deducted == credit.  It just means you don't have to pay Maryland state income tax on it for the year.  It will probably save you in the neighborhood of $50 to $100/year. 

Temp614258375007293

Awww. Well, that makes more sense anyway. Thank you!