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PARRIS N. GLENDENING, Governor S.B. 383
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10-208.
(n) (1) (i) In this subsection the following words have the meanings
indicated.
(ii) "Purchase)'" has the meaning stated in § 18-1991 of the
Education Article.
(II) "CONTRIBUTOR" MEANS A CONTRIBUTOR WITHIN THE
MEANING OF § 529 OF THE INTERNAL REVENUE CODE.
(III) "DESIGNATED BENEFICIARY" HAS THE MEANING STATED IN §
529 OF THE INTERNAL REVENUE CODE.
(IV) "Qualified higher education expenses" has the meaning
stated in § 529 of the Internal Revenue Code.
(V) "QUALIFIED PREPAID TUITION PROGRAM" MEANS A QUALIFIED
TUITION PROGRAM UNDER WHICH AN INDIVIDUAL MAY PURCHASE TUITION
CREDITS OR CERTIFICATES ON BEHALF OF A DESIGNATED BENEFICIARY WHICH
ENTITLE THE DESIGNATED BENEFICIARY TO THE WAIVER OR PAYMENT OF
QUALIFIED HIGHER EDUCATION EXPENSES OF THE DESIGNATED BENEFICIARY.
(VI) "QUALIFIED TUITION PROGRAM" HAS THE MEANING STATED IN
§ 529 OF THE INTERNAL REVENUE CODE.
(2) (I) The subtraction under subsection (a) of this section includes the
amount of advance payments of qualified higher education expenses made by a
purchaser during the taxable year as provided under a prepaid contract in accordance
with the Maryland Prepaid College Trust CONTRIBUTIONS MADE BY A CONTRIBUTOR
TO A QUALIFIED PREPAID TUITION PROGRAM ON BEHALF OF A DESIGNATED
BENEFICIARY.
(II) THE SUBTRACTION UNDER THIS SUBSECTION DOES NOT
INCLUDE ANY AMOUNT THAT IS A TAX-FREE ROLLOVER OR CHANGE IN DESIGNATED
BENEFICIARIES UNDER § 529(C)(3)(C) OF THE INTERNAL REVENUE CODE FROM
ANOTHER QUALIFIED TUITION PROGRAM, AS DEFINED IN § 529 OF THE INTERNAL
REVENUE CODE.
(3) (I) (I) Subject to paragraph (4) of this subsection, for each
prepaid contract FOR EACH CONTRIBUTOR FOR EACH DESIGNATED BENEFICIARY,
the subtraction under paragraph (2) of this subsection may not exceed $2,500 for any
taxable year.
(II) FOR PURPOSES OF THE TAX LIMITATION UNDER THIS
PARAGRAPH, EACH SPOUSE ON A JOINT INCOME TAX RETURN SHALL BE TREATED
SEPARATELY.
(II) FOR PURPOSES OF THE LIMITATION UNDER THIS PARAGRAPH,
EACH SPOUSE ON A JOINT INCOME TAX RETURN SHALL BE TREATED SEPARATELY.
(4) The amount disallowed as a subtraction under this subsection for any
taxable year as a result of the limitation under paragraph (3) of this subsection shall
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