Income Tax in Maryland: Complete Guide 2026
Data Notice: Figures, rates, and statistics cited in this article are based on the most recent available data at time of writing and may reflect projections or prior-year figures. Always verify current numbers with official sources before making financial, medical, or educational decisions.
Income Tax in Maryland: Complete Guide 2026
Tax information is for educational purposes only and does not constitute tax advice. Consult a licensed tax professional for your specific situation.
Maryland has one of the more complex state income tax structures in the nation, combining a graduated state tax with eight brackets (ranging from ~2.00% to ~5.75%) and mandatory county or Baltimore City “piggyback” taxes that range from ~2.25% to ~3.20%. This dual-layer system means Maryland residents can face combined state and local income tax rates as high as ~8.95%. Understanding both layers is essential for accurate planning and filing.
Maryland Income Tax Rates (2026)
State Rates — Single Filers
| Taxable Income | Rate |
|---|---|
| $0 — ~$1,000 | ~2.00% |
| ~$1,001 — ~$2,000 | ~3.00% |
| ~$2,001 — ~$3,000 | ~4.00% |
| ~$3,001 — ~$100,000 | ~4.75% |
| ~$100,001 — ~$125,000 | ~5.00% |
| ~$125,001 — ~$150,000 | ~5.25% |
| ~$150,001 — ~$250,000 | ~5.50% |
| Over ~$250,000 | ~5.75% |
County Piggyback Tax Rates
| County/City | Local Rate | Combined Top Rate |
|---|---|---|
| Baltimore City | ~3.20% | ~8.95% |
| Howard County | ~3.20% | ~8.95% |
| Montgomery County | ~3.20% | ~8.95% |
| Prince George’s County | ~3.20% | ~8.95% |
| Anne Arundel County | ~2.81% | ~8.56% |
| Baltimore County | ~2.83% | ~8.58% |
| Worcester County | ~2.25% | ~8.00% |
| Garrett County | ~2.65% | ~8.40% |
How Maryland Income Tax Works
Dual-Layer System
Maryland’s income tax has two mandatory components. The state tax uses eight graduated brackets, while the county (or city) piggyback tax is a flat percentage of your Maryland taxable income. Both are reported on the same return (Form 502) and collected by the state Comptroller, who distributes the local portion to counties.
Standard Deduction
Maryland’s standard deduction is ~15% of Maryland AGI, with minimum and maximum limits:
| Filing Status | Minimum | Maximum |
|---|---|---|
| Single | ~$1,800 | ~$2,550 |
| Married filing jointly | ~$3,600 | ~$5,150 |
This percentage-based approach means lower-income filers may receive a smaller deduction than they would under federal rules, while the cap limits the benefit for higher earners.
Itemized Deductions
Maryland allows itemized deductions that largely conform to federal rules. Key provisions:
- State and local taxes: Not deductible on the Maryland return
- Mortgage interest and charitable contributions: Deductible following federal guidelines
- Medical expenses: Deductible for amounts exceeding ~7.50% of federal AGI
Personal Exemptions
Maryland provides personal exemptions that vary by income:
| Maryland AGI | Exemption per Person |
|---|---|
| Under ~$100,000 | ~$3,200 |
| ~$100,001 — ~$125,000 | ~$1,600 |
| ~$125,001 — ~$150,000 | ~$800 |
| Over ~$150,000 | $0 |
This sliding scale means higher-income filers lose the exemption entirely.
Key Maryland Tax Credits
- Earned Income Credit: Maryland offers both a refundable credit (~45% of the federal EITC for childless filers, ~28% for filers with children) and a nonrefundable credit (~50% of the federal credit).
- Child Tax Credit: A state credit of up to ~$500 per qualifying child for families meeting income thresholds.
- Poverty Level Credit: Eliminates state tax liability for filers with income at or below the federal poverty guidelines.
- Student Loan Debt Relief Credit: Up to ~$5,000 for qualifying borrowers through a competitive application process.
- Maryland 529 Plan Deduction: Contributions to a Maryland 529 plan are deductible up to ~$2,500 per account per year, with a ~10-year carryforward.
- Property Tax Credit (Homeowner’s): Based on income and property taxes, this credit reduces the tax burden for qualifying homeowners.
Who Must File in Maryland
You must file a Maryland return if:
- You are a resident with income exceeding the minimum filing requirement (varies by filing status and age)
- You are a part-year resident or nonresident with Maryland-source income
- You owe county piggyback tax
- You want to claim a refund of Maryland withholding
Maryland uses Form 502 for residents and Form 505 for nonresidents. The filing deadline is April 15.
Comparison to National Average
| State | Top State Rate | Local Income Tax | Max Combined |
|---|---|---|---|
| Maryland | ~5.75% | ~2.25% — ~3.20% | ~8.95% |
| Virginia | ~5.75% | None | ~5.75% |
| Pennsylvania | ~3.07% | ~1.00% — ~3.90% | ~6.97% |
| D.C. | ~10.75% | N/A | ~10.75% |
| Delaware | ~6.60% | None | ~6.60% |
| National average | ~4.60% | Varies | Varies |
Maryland’s combined rate of up to ~8.95% is among the highest on the East Coast and significantly above the national average. The mandatory county piggyback tax is the primary driver of this elevated burden.
Tips for Minimizing Maryland Income Tax
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Maximize retirement contributions. Reducing federal AGI through 401(k) and IRA contributions directly lowers your Maryland taxable income and can preserve personal exemptions.
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Claim both earned income credits. Maryland uniquely offers both a refundable and nonrefundable EITC. Eligible filers should claim both for maximum benefit.
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Contribute to a Maryland 529 plan. The ~$2,500 per-account deduction reduces state taxable income, and unused deductions can be carried forward for ~10 years.
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Monitor your personal exemption eligibility. Since exemptions phase out above ~$100,000, managing income near that threshold can preserve up to ~$3,200 per person.
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Apply for the Student Loan Debt Relief Credit. This competitive credit of up to ~$5,000 requires a separate application through the Maryland Higher Education Commission.
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Understand county rate differences. If relocating within Maryland, the county you choose can change your local rate by nearly ~1%, which compounds over time.
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File electronically. Maryland processes e-filed returns faster and offers free filing through iFile for eligible taxpayers.
Key Takeaways
- Maryland combines a graduated state income tax (up to ~5.75%) with county piggyback taxes (~2.25% to ~3.20%), creating combined rates up to ~8.95%.
- The standard deduction is ~15% of AGI, capped at ~$2,550 (single) or ~$5,150 (joint).
- Personal exemptions of up to ~$3,200 per person phase out entirely above ~$150,000 AGI.
- Maryland offers both refundable and nonrefundable earned income credits.
- The Student Loan Debt Relief Credit (up to ~$5,000) is a competitive program unique to Maryland.
- County piggyback rates vary significantly, making your county of residence a meaningful tax planning factor.
Next Steps
- Federal Income Tax Guide 2026 — See how federal AGI flows into your Maryland return.
- State Income Tax Rates Comparison 2026 — Compare Maryland to all 50 states.
- Tax Bracket Calculator — Estimate your combined federal, state, and county tax.
- Self-Employment Tax Guide — Maryland considerations for self-employed filers.
- Find a CPA Near You — Get professional help with Maryland’s complex system.