There are two general types of 529 plans: prepaid programs and savings programs. The states offering prepaid tuition contracts covering in-state tuition will allow you to transfer the value of your contract to private and out-of-state schools. If you decide to use a 529 savings program, the full value of your account can be used at any accredited college or university.
The contributor stays in control of the account. You decide when withdrawals are taken and for what purpose. Most plans even allow you to reclaim the funds for yourself any time with a 10% penalty plus the payment of income tax. You can contribute up to $230,000 per beneficiary in many state plans. Generally, there are no income limitations or age restrictions.
Washington, DC College Savings PlanDC College Savings Plan
Earnings are accumulated tax-deferred and federal-tax-free if used for qualified college expenses
Maryland College Savings PlansMaryland Prepaid College Trust
Maryland College Investment Plan
Earnings are tax-free when used toward eligible college expenses. You can deduct up to $2,500 of contributions each year from Maryland income per account. Contributions in excess of $2,500 per account can be deducted in future years until full amount of payments has been deducted. Earnings are federally tax-free when used toward eligible college expenses through 2010.
Virginia College Savings PlansVirginia Prepaid Education Program
Virginia Education Savings Trust
College America 529 Savings Plan
Distributions from 529 accounts that do not exceed the amount of adjusted qualified higher education expenses (tuition, mandatory fees, certain room and board costs, and equipment and supplies required for enrollment) are not taxable through December 31, 2010.