On the last day of Chanukah, the Jewish day school community in Maryland was treated to some very welcome news from the office of Governor Larry Hogan (click here for press release). The news about fully funding the Maryland Match program paved the way for a lot of extra “Chanukah gelt” (cash) for hundreds and perhaps thousands of Jewish day school households.
Earlier this year, over a four week period, private school families diligently opened 529 accounts for each of their children (or grandchildren) to take advantage of a new provision of the federal (and state) tax codes. The federal tax overhaul in December 2017 expanded 529 accounts (tax-advantaged saving plans where earnings grow tax-free), to include K-12 tuition as a qualified expense. Maryland offers additional state benefits which makes contributing to a 529 plan, beneficial to parents immediately. For eligible families, the state goes a step further and offers a match of $250 or $500 for each modest income household if they make a minimum contribution to these accounts. Due to minimal demand for the matching incentive in 2017, the state had only allocated $3 million for the program, and would award funds on a first-come first-served basis. Families applied, hoping to get some of those funds, but many wondered if they would ever see the extra cash. In truth, their skepticism was justified.
Due (in large part) to the massive emphasis the Jewish day school community placed on this opportunity and all of the information and materials researched, compiled, and shared by Agudath Israel on their www.Tuition529.com website, there was an astounding 400% increase in applicants for the matching funds. To meet that demand, the program needed more than double the state’s $3 million allocation. In response to this unprecedented demand, and hoping to inspire continued investments in education, recently Governor Hogan made the magnanimous gesture to provide funding to cover all Maryland Match applicants – an additional $3.3 million!
On Thursday morning, account holders awoke to find their 529 accounts funded by the state of Maryland with, in most cases, $500 per child per parent!
“Thank you to retiring Senator Edward Kasemeyer for leading the charge on the Maryland Match,” said Agudath Israel of Maryland’s director Rabbi Ariel Sadwin, “and thank you to Governor Larry Hogan for once again providing our community with a great education benefit by covering the extra funding for the program!”