Maine 529 Plan Rules And College Savings Options
Maine has a 529 plan called NextGen 529 that can help you save for college. Maine does not offer a 529 Able plan.
If you live in Maine, these might be good options for you to save for college.
These programs are designed to help make college more affordable - so that you can get the education you need. By saving for college early on, you can make paying for college easier down the road.
If you're not quite sure how 529 plans work, check out this starter guide to What Is a 529 Plan?
There is also a specific order of operations to save for college that we recommend families follow. These programs are specific to the State of Maine. Each state has different rules when it comes to 529 plan savings. Here are the Maine 529 plan rules.
Average Cost Of College In Maine
When saving for college in Maine, it's important to take into consideration the cost of attendance in the state. If you choose to go to an out-of-state school, you need to look at the average cost of attendance in that state.
There are 35 colleges and universities in the State of Maine.
The total average cost of college (Cost of Attendance) in Maine for in-state residents is $19,874 for 2023. This includes tuition, room and board, books and supplies, and other expenses.
For just tuition alone, the average undergraduate tuition for in-state residents is $7,171 for 2023. The cost of tuition in Maine has been rising at about 2% per year.
See how this compares to the average cost of college here. Keep in mind the average student loan debt by graduating class here.
Explore the data here.
Maine 529 Plan Tax Information
Tax savings is one of the big benefits of using a 529 plan to save for college. On a federal-level, there is no tax savings for contributions, but qualified distributions are tax-free.
Here are the special tax benefits and considerations for using a 529 plan in Maine.
Contributions
Starting in 2023, Maine is once again offers a tax deduction for contributions.
Maine state taxpayers earning less than $100,000 if filing single or married filing separately and $200,000 if filing as head of household or married filing jointly can claim a tax deduction of up to $1,000 per student (designated beneficiary).
Minimum: $25.
Maximum: Accepts contributions until all account balances for the same beneficiary reach $520,000.
Matching Contributions:
- New accounts opened by the baby's first birthday with at least $25 will receive a $100 new account grant.
- The NextStep Matching Grant provides a 30% match on contributions up to a $300 grant per year (one grant per eligible beneficiary, no income limitations), for a total of $90.
Rollovers
Maine follows federal tax treatments.
Qualified Distributions
Qualified distributions from a Maine and non-Maine 529 plan are tax-free.
K-12 Education
Maine does conform with Federal law in regard to using a 529 plan for K-12 tuition. See this guide: Using a 529 Plan For Elementary and High School Private Education.
Student Loans
Maine does conform with Federal law for using a 529 plan for student loans.
Rollover To Roth IRA
Maine does allow the rollover to a Roth IRA up to $35,000. Learn more about the 529 plan to Roth IRA rollover here.
Non-Qualified Distributions Taxes, Penalties, Recapture
A non-qualified withdrawal from a Maine 529 is subject to Maine income tax on any earnings.
Maine 529 College Savings Plan Options
Maine has several 529 plan options - one consumer plan and one plan that is sold by financial advisors (we're big advocates of doing-it-yourself, you don't need to pay a financial advisor for this).
Maine NextGen 529 Plan
The Maine NextGen 529 is the name of Maine's 529 Plan. This plan offers a variety of investment options, including age-based portfolios that become more conservative as the child approaches college, and static investment fund options.
The funds offered include Blackrock and iShares.
Fees:
There is a program management fee of up to 0.15%.
The underlying funds all charge expense ratios from 0.09% to 0.53% depending on the investment option.
Who Should Use It:
We recommend that Maine residents use the Maine NextGen 529 plan due to low plan costs and solid investment options. Plus, the program matching is a great bonus.
We recommend that out-of-state residents utilize other plans.
Maine 529 Able Plan Options
529A Able accounts are accounts designed to help those with disabilities escape poverty and save for themselves. Learn more about 529A Able Plans here.
Maine doesn't offer a state specific 529 ABLE Plan.
Other Programs To Save For College
A 529 plan is one way to save for college. Remember, we have a full guide on our approach to college savings here - and it helps you find other options.
If you're looking for ways to boost your college savings, check this out:
Backer
Backer is one of our favorite ways to save for college because they make gifting for college so easy. You can setup an account, link your 529 plan (in most states), and get a unique URL that you can share with friends and family to save for your children's college.
Plus, they have Backer Bucks, which allow you to earn rewards and rebates for the shopping you already do - directly deposited into your children's 529 plan.
Upromise
Upromise is another awesome tool to help you save for college because they have a lot of ways that you can earn money for your 529 plan. You can get rebates and rewards, and you can get cash back into your child's 529 plan by using the Upromise credit card.
Maine Financial Aid
Using a 529 plan isn't the only way to save money for college. Each state typically offers a variety of financial aid programs for their residents. These include scholarships and grants, and sometimes unique forgivable student loan opportunities.
Check out the list of Maine Student Loan and Financial Aid Programs.
Return to the full list of 529 Plans By State.
Editor: Clint Proctor Reviewed by: Mark Kantrowitz
