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June 1 deadline approaching for Maryland 529 state contribution program

The deadline to apply for a chance for a state contribution on a Maryland 529 College Investment Plan is rapidly approaching.

For those who have a college investment plan, there’s a chance to receive either $250 or $500. Michelle Winner, the public relations and marketing program manager for Maryland 529, said the state contribution program is in its second year of existence.

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“The Maryland 529 plan is a tax-deferred college savings plan,” Winner said. There are different investment plans — enrollment-based portfolios or fixed portfolios. These plans help families get started on saving, she said.

To be eligible for the state contribution, there are a handful of requirements.

According to the Maryland 529 website, the beneficiary must be a Maryland resident and the account holder's Maryland taxable income cannot exceed the maximum household income range, which is $112,500 as an individual or $175,000 as a couple based on the previous taxable year.

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The Maryland College Investment Plan account holders also are only eligible for state contribution if they opened the plan after Dec. 31, 2016, or they can open a new plan.

All applications must be submitted for the Save4College State Contribution Program prior to June 1.

There are also minimum contributions, according to the website.

An individual who makes $49,999 or less or a joint couple who makes $74,999 or less must make at least a $25 contribution to be eligible for a $500 state contribution. For an individual who makes $50,000 to $87,499 or a joint couple who makes $75,000 to $124,999, they must make at least a $100 contribution to be eligible for a $500 state contribution. The last bracket, $87,500 to $112,500 for an individual or $125,000 to $175,000 for joint, must contribute at least $250 to be eligible for a $250 state contribution.

Winner said those who receive the money are determined by the order applications were received, the requirements and if they have previously received state contribution. If they have previously received that money from the state, they get bumped down on the list and priority goes to those who have not received money yet, she said.

“The advantage here is helping a family get a jump-start,” Winner said.

Students are coming out of college with a tremendous amount of debt, she said, and with this type of plan, there’s a chance to start saving early to help avoid taking out so much debt later. Especially in lower income families, she said, even just having a small amount of money saved makes it more likely for a child to get to college.

It’s important for families to understand that every little bit counts, she said.

“That seed is planted,” she said, adding, “You don't really need a lot in your account to be successful.”

For more information, visit www.maryland529.com/MDMatch250 or call 888-4MD-GRAD (463-4723).

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