Section 529 College Savings Plans allow parents and grandparents to set aside significant amounts of money for the higher education expenses of their children and grandchildren. They were authorized by a 1997 federal bill but are run by the individual states. Money contributed to a 529 plan grows tax-free and is never subject to state or federal income tax if used for qualified higher education expenses..
In mid-July, the state of Maryland announced that T. Rowe Price will manage its new 529 plan. The plan, which will begin operation this fall, will offer 10 different investment options. While it is open to investors in all states, Maryland residents will receive an added benefit �the opportunity to deduct as much as $2,500 for contributions to each account under the plan. These deductions can be carried forward for 10 years if necessary to use them up and offset one’s Maryland income tax liability.
For a more detailed explanation of 529 plans and their benefits, see my recent article on the WorldWIT Web site at Simon Says.
How can BWFA help me with a 529 plan?
Because every state has either established a plan or expects to launch a plan in the near future, choosing the plan that is right for you can be a complex and confusing task. 
Plans vary in a number of ways, and the best plan for you will depend upon numerous factors, including your planning horizon, risk tolerance, state of residence, tax sensitivity, and overall savings needs.
Even more significantly, your BWFA advisor can guide you in integrating a 529 plan with your current college, retirement, and estate planning goals. Funds within a 529 plan are not subject to estate taxes and (if used for qualified education expenses) are exempt from federal and state income tax as well. Parents, and even more so grandparents, now have an opportunity to transfer sizable funds to children and grandchildren in an extremely tax efficient manner.
Call today to set up a 529 consultation. We’re excited about this new planning vehicle and ready to help you make the most of it!