Can MD state contribution program benefits be rolled over to other beneficiaries?

[MD529er]

My wife and I have separate Maryland 529 College Investment Plan accounts for our daughter. In 2018 we participated in the Maryland state contribution program where after applying, we made a minimum contribution ($100 each in our case) to receive a matching contribution from the state ($500 each in our case).

It was such a nice benefit I find myself asking is there any prohibition on my wife and I opening additional accounts and applying for this benefit. It would seem that we could easily each open accounts for each other and ourselves and apply for the state contribution program with each account. In a year or several years down the road we would want to roll that money into the accounts designating our daughter as the beneficiary.

So what am I missing? This seems too good to be true and I surely don't want to run afoul of the law.

Thanks in advance for your feedback!

[dcandmc]

I think you should go straight to the best source of information.

What if I Have Additional Questions?

Click here to access Frequently Asked Questions. You may also call 888.4MD.GRAD (888.463.4723) and select Option 1, or email info@marylandcollegeinvestmentplan.org.

https://maryland529.com/Save4College/State-Contribution-Program/Contact-Us

[MD529er]

I agree and submitted the question to the maryland529.com folks shortly after posting here.

I received a prompt response that I'll share here:

"You and your spouse can each open an account for the other and apply for the Maryland State Contribution Program. There is currently no prohibition from rolling the funds to another beneficiary after they have been received.

State contributions are not guaranteed. The state funding for contributions is limited to $3 million in fiscal year 2019 and each fiscal year thereafter. As with the entire state budget, the Maryland General Assembly has final approval. If resources are insufficient to fully fund all eligible accounts, Maryland 529 shall provide contributions in the order in which applications are received in good order and give priority to applications of account holders who did not receive a state contribution in any prior year. If you receive a state contribution for any account in a given year, you are not eligible in that year for the income deduction on your state taxes for contributions that you made to that or any other Maryland College Investment Plan account. You should check with your tax advisor regarding your specific situation."