Maryland tax laws reach you from several directions at once: a graduated state income tax running from 2% to 5.75% (and up to 6.50% for the highest-earning joint filers), a county income tax of 2.25% to 3.30% collected alongside it, a flat 6% sales tax, property taxes set locally on assessments updated every three years, and both an estate tax and a separate inheritance tax at death. Individual returns are due April 15.
State Income Tax Brackets
Maryland uses graduated brackets, so higher portions of your income are taxed at progressively higher rates. The rates apply to Maryland taxable income, which starts with your federal adjusted gross income and then adjusts for Maryland-specific additions and subtractions.1Maryland General Assembly. Maryland Code Tax-General 10-105 – State Income Tax Rates
For single filers and married couples filing separately:
- 2% on the first $1,000 of taxable income
- 3% on $1,001 to $2,000
- 4% on $2,001 to $3,000
- 4.75% on $3,001 to $100,000
- 5% on $100,001 to $125,000
- 5.25% on $125,001 to $150,000
- 5.5% on $150,001 to $250,000
- 5.75% on income above $250,000
Married couples filing jointly, surviving spouses, and heads of household get wider brackets and face two additional brackets at the top:
- 2% on the first $1,000
- 3% on $1,001 to $2,000
- 4% on $2,001 to $3,000
- 4.75% on $3,001 to $150,000
- 5% on $150,001 to $175,000
- 5.25% on $175,001 to $225,000
- 5.5% 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 above $1,200,000
The wider joint brackets matter for two-income households. A married couple earning $200,000 jointly stays in the 4.75% bracket on everything above $3,000, while a single filer at the same income crosses into the 5.5% bracket.2Maryland General Assembly. Maryland Code Tax-General 10-105 – State Income Tax Rates
County and Baltimore City Income Tax
Every Maryland county and Baltimore City adds its own local income tax on top of the state tax. State law allows each jurisdiction to set a rate between 2.25% and 3.20% of Maryland taxable income.3Maryland General Assembly. Maryland Code Tax-General 10-106 – County Income Tax Rate
Most jurisdictions set the rate at or near the cap. For 2026, the lowest flat rate is Worcester County at 2.25%, while Baltimore City, Baltimore County, Montgomery County, Prince George’s County, and many others charge the full 3.20%. Dorchester County and Kent County impose 3.30% under separate provisions. Anne Arundel and Frederick use graduated local brackets that start lower and step up to 3.20% for higher earners.4Comptroller of Maryland. 2026 Maryland State and Local Income Tax Withholding Information
You don’t file a separate local return. The Comptroller collects the local tax along with the state tax through a single filing and distributes the revenue to each jurisdiction. The practical effect is a combined state-plus-local rate for most residents of roughly 7.95% to 8.95% of taxable income.
Who Counts as a Maryland Resident
Maryland taxes residents on all income regardless of where it was earned. You qualify as a resident in two ways: if you are domiciled in Maryland on the last day of the tax year, or if you maintained a place of abode in the state for more than six months of the year, even if you consider another state your permanent home.5Maryland General Assembly. Fiscal and Policy Note – House Bill 183
That second category catches people off guard. Keep an apartment or house in Maryland while spending most of the year elsewhere and you can still qualify as a statutory resident, owing Maryland tax on your entire income. Nonresidents who earn Maryland-source income (wages from a Maryland employer, rent from Maryland property) file Form 505 and are taxed only on that portion.
Sales and Use Tax
Maryland’s general sales and use tax rate is 6%, applied to most tangible goods and certain services. The statute calculates it as 6 cents on every dollar of the purchase price. Alcoholic beverages face a higher rate of 9%.6Maryland General Assembly. Maryland Code Tax-General 11-104 – Tax Rate
No local jurisdiction can add its own sales tax on top of the state rate. The 6% is the same in Baltimore, Bethesda, or Ocean City. Buy taxable goods online or from an out-of-state retailer that doesn’t collect Maryland sales tax and you owe a 6% use tax yourself; most large online retailers now collect automatically, but smaller sellers often don’t.
Groceries bought for off-premises consumption from a store running a substantial grocery business are exempt. Prepared food sold for immediate consumption, including hot meals and carry-out, remains taxable. Crabs and other seafood not prepared for immediate eating are also exempt.7Maryland General Assembly. Maryland Code Tax-General 11-206 – Food Prescription medicine, corrective eyeglasses, diapers, toothbrushes, diabetic care supplies, and feminine hygiene products are exempt as well.
Property Tax
Property taxes are levied at both the state and local levels. The State Department of Assessments and Taxation (SDAT) values all real property on a rolling three-year cycle, so your assessment updates once every three years to reflect market conditions. The state’s own property tax is $0.112 per $100 of assessed value; the much larger share of your bill comes from your county or municipality, which sets its own rate on SDAT’s valuations.
Homestead Tax Credit
The Homestead Tax Credit caps the annual increase in your taxable assessment at 10% for state property tax purposes, protecting you from sharp spikes when market values rise fast. Counties and municipalities can set their own cap at 10% or lower. The credit applies to your primary residence, but you must submit a one-time application to SDAT to establish eligibility.8Maryland Department of Assessments and Taxation. Homestead Tax Credit
Homeowners’ Property Tax Credit
Lower-income homeowners may qualify for a credit that limits property tax based on income. For the 2026 credit, combined gross household income cannot exceed $60,000. That figure includes income from all occupants other than dependents or those paying rent, including nontaxable sources like Social Security.9Maryland Department of Assessments and Taxation. Homeowners’ Property Tax Credit Program
Retirement Income
Social Security benefits are completely exempt from Maryland state income tax, even if a portion of those benefits is taxable federally.10Maryland General Assembly. Fiscal and Policy Note – House Bill 2
For other retirement income such as pensions and 401(k) distributions, Maryland offers a pension exclusion that lets qualifying taxpayers subtract a portion of that income before calculating state tax. You generally must be 65 or older, or totally disabled. The maximum exclusion was $41,200 for the 2025 tax year; the amount is adjusted periodically and may differ for 2026.11Comptroller of Maryland. Maryland Pension Exclusion
Estate and Inheritance Tax
Maryland is one of the few states that imposes both an estate tax and a separate inheritance tax. They are distinct, they can both apply to the same death, and the distinction matters for anyone doing estate planning.
Estate Tax
The estate tax is calculated on the total value of a deceased person’s assets. For anyone dying on or after January 1, 2019, the Maryland exemption is $5 million. Estates valued below that owe no state estate tax. The exemption does not adjust for inflation, so it has stayed at $5 million while the federal exemption has climbed well above that figure.12Maryland General Assembly. Maryland Code Tax-General 7-309 – Maryland Estate Tax
A surviving spouse can potentially use the deceased spouse’s unused portion of the $5 million exemption. Qualified agricultural property passing to a qualifying recipient can be excluded from the estate’s taxable value up to $5 million, with a reduced 5% rate on agricultural value above that amount.
Inheritance Tax
The inheritance tax is imposed on the person receiving the assets, not on the estate. The rate is 10% of the clear value (fair market value minus expenses) of inherited property.13Maryland General Assembly. Maryland Code Tax-General 7-204 – Tax Rate
Close family members are fully exempt. The exemption covers spouses, parents (including stepparents), grandparents, children (including stepchildren), grandchildren and other lineal descendants, spouses of children and grandchildren, and siblings. If every recipient falls into one of those categories, no inheritance tax is owed at all.14Maryland General Assembly. Maryland Code Tax-General 7-203 – Inheritance Tax Exemptions
The inheritance tax hits hardest when assets pass to friends, unmarried partners, nieces, nephews, cousins, or other non-exempt recipients. Because the two taxes operate independently, an estate worth less than $5 million can owe no estate tax while a non-relative beneficiary still owes 10% on what they receive.
Filing Deadlines and Penalties
Maryland individual income tax returns are due April 15, the same date as the federal deadline. If April 15 falls on a weekend or holiday, the due date shifts to the next business day. Resident taxpayers file Form 502 to report income and calculate both state and local taxes.15Comptroller of Maryland. Filing Information for Individual Income Tax
The Comptroller’s iFile system allows free electronic filing through the state’s website. Paper returns are still accepted by mail, but electronic filing speeds processing and refunds considerably.16Comptroller of Maryland. iFile For Personal Income Tax Returns
If you expect to owe more than $500 in Maryland tax beyond what is withheld from your paychecks, you need to make quarterly estimated tax payments. The four quarterly deadlines generally fall on April 15, June 15, September 15, and January 15 of the following year. Win $500 or more in a prize, lottery, or raffle without Maryland tax withheld, and you must file a declaration and pay the estimated tax within 60 days.17Comptroller of Maryland. Estimated Tax Worksheet Instructions
Missing the deadline triggers both a penalty and interest on any unpaid balance. The penalty accrues from the date the return was due, and interest builds until the balance is paid in full. File on time even if you cannot pay the full amount owed; that reduces total penalties, and the Comptroller’s office can set up a payment plan for the balance.