Maryland Income Tax: Rates, Brackets, and Deadlines

Maryland income tax has two layers stacked on top of each other: a graduated state tax that runs from 2% to 6.5%, and a separate local income tax set by your county (or Baltimore City) that ranges from 2.25% to 3.30%. Together they can push a high earner’s marginal rate above 9.5%. Residents file Form 502 by April 15 and owe tax on all income from any source; nonresidents file Form 505 and owe tax only on what they earned in Maryland.

Who Has to Pay Maryland Income Tax

Your residency status decides how much of your income Maryland can touch. The state recognizes three categories.

You are a full-year resident if Maryland is your domicile — your permanent home, the place you intend to return to — on the last day of the tax year. You also count as a resident under a separate statutory rule if you maintain a place of abode in Maryland for more than six months of the year and are physically present in the state for 183 days or more. Both conditions have to be met; owning a Maryland vacation home you rarely visit does not make you a statutory resident.¹

Full-year residents owe Maryland tax on worldwide income. Part-year residents, who move into or out of the state during the year, owe tax only on income earned while they were Maryland residents. Nonresidents owe tax only on income sourced to Maryland, which usually means wages for work physically performed in the state or income from Maryland rental property or a business operating there. A nonresident working remotely from another state for a Maryland employer generally does not owe Maryland tax on those wages.

You must file a Maryland return if your gross income exceeds the combined total of your standard deduction and personal exemptions. Because Maryland’s standard deduction is small, that threshold catches most people with any real income.

State Tax Rate Brackets for 2026

Maryland’s graduated state tax uses eight brackets, and joint filers get wider bands at the lower rates.²

For single filers, married filing separately, and dependents:

2.00% on the first $1,000
3.00% on income from $1,001 to $2,000
4.00% on income from $2,001 to $3,000
4.75% on income from $3,001 to $100,000
5.00% on income from $100,001 to $125,000
5.25% on income from $125,001 to $150,000
5.50% on income from $150,001 to $250,000
5.75% on income from $250,001 to $500,000
6.25% on income from $500,001 to $1,000,000
6.50% on income over $1,000,000

For joint filers, heads of household, and qualifying surviving spouses:

2.00% on the first $1,000
3.00% on income from $1,001 to $2,000
4.00% on income from $2,001 to $3,000
4.75% on income from $3,001 to $150,000
5.00% on income from $150,001 to $175,000
5.25% on income from $175,001 to $225,000
5.50% on income from $225,001 to $300,000
5.75% on income from $300,001 to $600,000
6.25% on income from $600,001 to $1,200,000
6.50% on income over $1,200,000

The 6.25% and 6.50% brackets are relatively recent additions affecting income well above $500,000.³

Local Income Tax by County

Every Maryland resident owes a local income tax to the county or Baltimore City where they live on December 31. Rates run from 2.25% to 3.30% of Maryland taxable income.³ Most counties sit at 3.20%. Worcester County charges the statewide minimum of 2.25%, Talbot County charges 2.40%, and Dorchester and Kent counties charge the maximum of 3.30%.²

A few counties use graduated local rates instead of a single flat percentage. Frederick County starts at 2.25% on the first $25,000 of taxable income for single filers and climbs to 3.20% on income above $150,000. Anne Arundel County ranges from 2.70% to 3.20% depending on income and filing status.² If you moved between counties during the year, your rate is set by where you lived on the last day.

Nonresidents skip the county rate. They pay a flat special nonresident tax of 2.25% on Maryland-sourced income, regardless of which county the income came from.⁴

Standard Deduction and Personal Exemptions

Maryland’s standard deduction is much smaller than the federal one. For tax year 2025, it is $3,350 for single filers and $6,700 for joint filers, heads of household, and qualifying surviving spouses.⁵ Legislation has been proposed to raise these amounts for tax year 2026; confirmed figures appear on the Comptroller’s site closer to filing season.

Each personal exemption is $3,200, but the amount phases out at higher incomes. For single filers, the exemption starts shrinking above $100,000 of federal adjusted gross income and disappears above $150,000. For joint filers and heads of household, the phaseout runs from $150,000 to $200,000. An extra $1,000 exemption for taxpayers 65 or older or who are blind is not subject to the phaseout.⁶

Subtractions That Reduce Your Taxable Income

Maryland starts from your federal adjusted gross income⁷ and then applies its own additions and subtractions. Three subtractions come up most often.

Pension Exclusion

Taxpayers who are 65 or older, or who are totally disabled, can subtract qualifying pension and retirement income. The maximum for tax year 2025 is $41,200, indexed each year to the maximum Social Security benefit.⁸ Here is the catch that surprises most retirees: the exclusion is reduced dollar-for-dollar by any Social Security or Railroad Retirement benefits you receive. A retiree with substantial Social Security may see the pension exclusion shrink to nearly nothing.

Military Retirement

Military retirees can subtract up to $20,000 of military retirement income if they are 55 or older. Those under 55 can subtract up to $12,500 under current law.⁹

Maryland 529 Contributions

Contributions to a Maryland 529 education savings plan qualify for a subtraction of up to $2,500 per beneficiary per year. Anything above $2,500 for a single beneficiary can be carried forward and deducted over the next 10 years. Contributions to another state’s 529 plan do not qualify.¹⁰

If You Live or Work Across State Lines

Maryland has reciprocal tax agreements with Pennsylvania, Virginia, West Virginia, and the District of Columbia. Under these agreements, residents of those jurisdictions who earn wages in Maryland are exempt from Maryland tax on those wages, and vice versa.¹¹ The agreements cover wages, salaries, and compensation for personal services only. They do not cover business income, rental income, or investment income.

For Virginia, D.C., and Pennsylvania residents, the exemption applies only if you do not maintain a place of abode in Maryland for more than six months of the year. The West Virginia agreement applies regardless of how long you spend in Maryland.¹¹ If your Maryland employer is withholding Maryland tax anyway, file a corrected Form MW507 to stop the withholding, and file Form 505 to recover anything already withheld.¹²

If you earn income in a state without a reciprocal agreement, or you earn non-wage income taxed by another state, Maryland offers a credit for taxes paid to other states. The credit reduces your Maryland tax by what you paid the other state on the same income, but it is capped at the Maryland tax that would have been due on that income. If the other state taxed you more heavily than Maryland would have, you do not get the difference back; Maryland just zeroes out its own tax on that piece of income. Claim it on Form 502CR, attached to your resident Form 502 along with a copy of the nonresident return you filed elsewhere. Nonresidents filing in Maryland cannot claim this credit.¹³

Estimated Tax Payments

If you are self-employed, or you have significant income that is not subject to Maryland withholding, you may need to pay estimated tax quarterly. The trigger is expecting to owe more than $500 beyond what is withheld from your paycheck.¹⁴

Payments are due April 15, June 15, September 15, and January 15 of the following year. To avoid an underpayment penalty, your total payments for the year must equal at least 90% of your current-year tax or 110% of your prior-year tax.¹⁵ The Comptroller does not assess a penalty when the shortfall is under $500.

Filing Deadline, Forms, and Extensions

Residents file Form 502. Nonresidents with Maryland-sourced income above the filing threshold file Form 505 with Form 505NR. Part-year residents also use Form 502, reporting only income earned while they were Maryland residents.¹⁶ Returns are due April 15 of the year after the tax year.

Need more time? Submit Form 502E by April 15 to request an extension. If you expect to owe nothing and have already filed federal Form 4868, you do not need a separate Maryland extension.¹⁷ An extension only pushes back the filing deadline. Your payment is still due April 15, so send your best estimate with the extension request.

Penalties and Interest for Late Filing or Payment

Miss April 15 without an extension, or extend without paying, and two things happen. The late-payment penalty can reach up to 25% of the unpaid tax.¹⁸ Interest also accrues on unpaid balances from the original due date. The rate changes annually; for 2025 it was 11.4825%.

For underpaid estimated taxes, the Comptroller assesses interest and a penalty based on the shortfall. The penalty is waived if the underpayment is under $500 or your payments met the 90%/110% safe harbor.¹⁵ An extension protects you from late-filing penalties but does nothing about late-payment charges. If you think you owe, pay by April 15 even when the return itself is not finished.

1
Comptroller of Maryland. Administrative Release No. 37 – Maryland Income Tax
2
Comptroller of Maryland. 2026 Maryland State and Local Income Tax Withholding Information
3
Comptroller of Maryland. Tax Guidance – Maryland Income Tax Rates and Brackets
4
Comptroller of Maryland. Tax Information for Individual Income Tax
5
Comptroller of Maryland. What’s New for the 2026 Tax Filing Season (2025 Tax Year)
6
Comptroller of Maryland. Exemptions Worksheet
7
Maryland General Assembly. Article – Tax – General Section 10-101
8
Comptroller of Maryland. Maryland Pension Exclusion
9
Maryland General Assembly. Fiscal and Policy Note for House Bill 857
10
Maryland 529. Tax Advantages
11
Comptroller of Maryland. Administrative Release No. 3 – Nonresident Credits, Reciprocal Income Tax Agreements
12
Comptroller of Maryland. Personal Tax Tip 56 – When You Live in One State and Work in Another
13
Comptroller of Maryland. Maryland Form 502CR Income Tax Credits for Individuals
14
Comptroller of Maryland. Tax Guidance – Payment Methods
15
Cornell Law School – Legal Information Institute. Md. Code Regs. 03.04.01.02 – Estimated Tax Return
16
Comptroller of Maryland. Individual Tax Forms and Instructions
17
Comptroller of Maryland. Administrative Release No. 4 – Maryland Income Tax
18
Comptroller of Maryland. Penalty and Interest Charges