Maryland Income Tax: Rates, Brackets, and Local Piggyback

Maryland income tax comes in two layers: a graduated state tax that runs from 2% to 6.5%, and a local tax charged by every county and Baltimore City that runs from 2.25% to 3.30%. Both apply to the same taxable income, which starts with the adjusted gross income from your federal return. Where you live, how you file, and what you earn all shape the final number, and the combined marginal rate for most working Marylanders lands somewhere between 7% and 9%.

State Tax Brackets for 2025 and 2026

Maryland taxes income in slices. Each slice of your taxable income is taxed at the rate for that bracket, not your top rate applied to the whole amount.

For single filers, those filing separately, and dependents:

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

Joint filers, heads of household, and qualifying surviving spouses stay in the lower brackets longer:¹

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

A single filer sits in the 4.75% bracket from $3,001 up to $100,000. A joint filer stays in that same bracket to $150,000. The top rate of 6.50% starts at just over $1 million for singles and at just over $1.2 million for joint filers.²

Local County Tax (the Piggyback)

On top of the state rate, every Maryland county and Baltimore City charges its own income tax on the same taxable income. It is often called the piggyback tax. Most jurisdictions use a single flat rate. Those rates currently range from 2.25% in Worcester County to 3.30% in Dorchester and Kent counties, with most counties clustering around 3.20%.¹³

A few jurisdictions have moved to graduated local brackets. Anne Arundel and Frederick counties have used graduated structures since 2023. State law lets counties set graduated rates as long as no rate falls below 2.25% and higher brackets carry rates at least as high as the lower ones.⁴

Add the two layers to find your combined marginal rate. Someone in the state’s 4.75% bracket living in a county with a 3.20% local rate pays 7.95% on the next dollar earned. Report your county or city of residence accurately. The wrong jurisdiction can trigger a corrected assessment and a billing notice from the Comptroller.

Who Has to File

You must file a Maryland return if your gross income exceeds the threshold for your filing status. For tax year 2025, those thresholds are $15,750 for a single filer under 65, $31,500 for a married couple filing jointly where both spouses are under 65, and $23,625 for a head of household.⁵ If you earned less, you may still want to file to recover withheld taxes or claim refundable credits like the Earned Income Tax Credit.

Nonresidents who earned income from Maryland sources must file a Maryland return regardless of their home state’s rules. Part-year residents file for the portion of the year they lived in the state.

Residency Rules

Maryland sorts taxpayers into three categories, and the category decides how much of your income the state can reach.

Full-year residents were domiciled in Maryland on the last day of the tax year, or maintained a place of abode in the state for more than six months of the year even while claiming domicile elsewhere. They owe Maryland tax on all income, wherever earned.⁶
Part-year residents moved into or out of Maryland during the year. Their tax is prorated to income earned while they lived in the state.
Nonresidents live outside Maryland but earn income from Maryland sources, such as in-state rental property or work performed here. They are taxed only on that Maryland-source income.

The six-month rule catches people who do not think of themselves as Maryland residents. If you keep an apartment in Baltimore while claiming domicile in Virginia and that apartment is available to you for more than half the year, Maryland treats you as a resident for tax purposes. If you later leave the state and return within six months, there is a rebuttable presumption that you never truly intended to leave.⁶

Full-year and part-year residents both use Form 502. Nonresidents use Form 505 with the allocation Form 505NR. A common mistake is assuming part-year residents file the nonresident form; they do not.⁷

How Taxable Income Is Figured

Your Maryland return starts with the federal adjusted gross income from your federal Form 1040.⁸ You then add items Maryland taxes but the federal government does not, and subtract items Maryland exempts. The result, reduced by the standard deduction and personal exemptions, becomes your Maryland taxable income.

Standard Deduction and Exemptions

For tax year 2025, the Maryland standard deduction is $3,350 for single filers and $6,700 for joint filers, heads of household, and qualifying surviving spouses.⁹ The state does not allow itemizing in the same way the federal return does; the standard deduction is a fixed amount tied to filing status.

Each taxpayer also claims a $3,200 personal exemption per person, including dependents. The exemption phases out at higher income levels. For individual filers, phase-out begins at $100,000 of federal adjusted gross income and the exemption disappears above $150,000. For joint filers, the phase-out starts at $150,000 and finishes at $200,000. Taxpayers 65 or older or who are blind can claim an additional $1,000 exemption.⁹

Subtractions and Additions

The most useful subtractions involve retirement and federal interest. Maryland excludes interest and dividends on U.S. government securities, including Treasury bonds and savings bonds. Social Security and Railroad Retirement benefits are also subtracted.¹⁰ Retirees 65 or older, and taxpayers who are totally disabled, can subtract up to $41,200 in pension and retirement annuity income. The pension exclusion phases down at higher income levels and only applies to pension income already included in federal AGI.

The most common addition is interest on out-of-state municipal bonds. These are usually exempt from federal tax, but Maryland taxes the interest if the bonds were issued by a state or locality other than Maryland. If you hold a municipal bond fund, the portion attributable to non-Maryland bonds gets added back.

Credits That Reduce Your Tax

Maryland offers credits that come straight off your tax bill, not just off taxable income.

Earned Income Tax Credit

If you qualify for the federal EITC, Maryland adds a state credit equal to 50% of the federal amount. The state version reaches two groups the federal credit excludes: residents who file with an Individual Taxpayer Identification Number instead of a Social Security number, and childless adults under 25.¹¹

Child and Dependent Care Credit

If you claimed the federal child and dependent care credit, Maryland offers a state credit starting at 32% of your allowed federal credit. The credit phases out above $109,300 of income for individual filers and $169,900 for joint filers. If the credit exceeds your state tax liability, you may receive a refund of the excess, provided your federal AGI does not exceed $59,400 (individual) or $89,100 (joint).¹²

Filing and Paying

The Comptroller’s iFile portal lets you file Form 502 electronically at no cost if you meet the system’s requirements.¹³ Electronic filing is processed faster and cuts down on errors.

The return is due April 15. If you file and pay electronically, you have until April 30 to make the electronic payment, even though the return itself is due on the 15th.⁵ You can pay a balance by direct debit from a bank account or by credit card through the Comptroller’s payment portal.

Extensions

You can request a six-month extension that pushes your filing deadline to October 15. An extension to file is not an extension to pay. If you owe tax and do not pay by April 15, penalties and interest start running even with an approved extension.

If you expect no balance due and already have a valid federal extension on IRS Form 4868, Maryland automatically extends your state deadline without a separate form. If you do owe tax, file Form PV with your estimated payment by April 15.¹⁴

Estimated Tax Payments

If you receive income not subject to withholding and expect to owe more than $500 in Maryland tax after withholding and credits, you must make quarterly estimated payments.¹⁵ This commonly reaches freelancers, landlords, and retirees whose pension withholding does not cover their full liability.

For tax year 2026, estimated payments are due April 15, 2026, June 15, 2026, September 15, 2026, and January 15, 2027. Pay through the Comptroller’s online system or by mailing Form PV with a check.

Penalties and Interest

Missing deadlines gets expensive. Late payment penalties can reach up to 25% of the tax owed, and interest runs on unpaid balances at a rate set annually. For calendar year 2025, the interest rate was 11.4825%.¹⁶ Those charges compound month by month.

Estimated tax underpayments carry a separate penalty. If you were required to pay estimated taxes and either failed to file, paid late, or paid less than 90% of your actual current-year tax (and less than 110% of the prior year’s tax), the Comptroller will assess penalties and interest on the shortfall. Paying at least 110% of last year’s tax through withholding and estimated payments is the safest cushion against the underpayment penalty, no matter what you end up owing when you file.

1
Comptroller of Maryland. Maryland Income Tax Rates and Brackets
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Comptroller of Maryland. 2026 Maryland State and Local Income Tax Withholding Information
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Maryland Department of Legislative Services. 2026 Local Tax Rates
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Maryland General Assembly. Maryland Code Tax-General 10-106 – County Income Tax Rate
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Comptroller of Maryland. Tax Guidance – Filing Information for Individual Income Tax
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Maryland General Assembly. Maryland Code Tax-General 10-101 – Definitions
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Comptroller of Maryland. Individual Tax Forms and Instructions – Section: Choose the Right Income Tax Form
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Comptroller of Maryland. Maryland Form 502 – Resident Income Tax Return
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Comptroller of Maryland. Tax Guidance – What’s New for the 2026 Tax Filing Season
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Maryland General Assembly. Maryland Code Tax-General 10-207 – Subtractions From Federal Adjusted Gross Income – in General
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Comptroller of Maryland. Earned Income Tax Credit
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Comptroller of Maryland. Tax Credits, Deductions and Subtractions
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Comptroller of Maryland. Maryland Taxes Online Services
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Comptroller of Maryland. Individual Tax Forms and Instructions
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Comptroller of Maryland. Personal Tax Tip 54 – Should You Pay Estimated Tax to Maryland
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Comptroller of Maryland. Tax Guidance – Compliance FAQs