(2002)

Dear Honorable William Donald Schaefer

You have asked about the proper interpretation of a provision of the State income tax law that provides a deduction) called a "subtraction modification" in the law) for contributions to the Maryland College Investment Plan ("Investment Plan"), a savings vehicle established under State law for higher education expenses. In particular, you ask about the maximum deduction that a Maryland taxpayer may take with respect to annual contributions to the Investment Plan for a beneficiary.

The relevant statute permits a taxpayer to subtract up to $2,500 from federal…