Thank you for your editorial, “Better college savings” (Jan. 2) in which you encourage the Maryland legislature and governor to extend the state income tax benefits of College 529 Plan savings to those who invest in other states' plans, not just Maryland's home plan. I agree wholeheartedly.
I offer one additional point in favor of this move — it is very wrong for state tax laws to reward the patronage of one specific business, in this case, T. Rowe Price, by offering a tax deduction for doing business with only them.
I also offer two important clarifications to your information. The 529 plan is most like a Roth IRA, not an IRA or a 401(k). That is because the gains and growth are tax-free upon withdrawal if used for the intended purpose (education). And the Maryland tax break (for being a customer of T. Rowe Price) is a $2,500 deduction, not a credit. The deduction is worth about $200 given our lofty 8 percent state-plus-county income tax rate. Popular media often blithely use the term credit when they mean deduction, and the difference is huge.
Again, thanks for shining some light on this 18-year-old problem.
Matt Beverungen,, Ellicott City
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