Maryland's income tax brackets and rates

Maryland has a progressive income tax system, meaning the tax rate increases as your income goes up. You do not pay one flat rate on all your earnings — instead, different portions of your income are taxed at different rates. The state currently has eight tax brackets, ranging from 2% on the lowest incomes to 5.75% on the highest.

For the 2024 tax year, a single filer pays 2% on income up to $1,000, then the rate steps up at each bracket until reaching 5.75% on income over $300,000. If you are married filing jointly, the brackets are wider — for example, the 2% rate applies to income up to $2,000. The brackets adjust slightly each year for inflation, so the exact dollar amounts change annually.

Your effective tax rate — the percentage of your total income that goes to Maryland taxes — is lower than your highest bracket rate. For instance, if you earn $50,000 as a single filer, you do not pay 4.75% on all of it. You pay 2% on the first $1,000, then higher percentages on each bracket above that, which averages out to roughly 3.5% of your total income.

Key Takeaways

  • Maryland taxes income at eight different rates, starting at 2% and reaching 5.75%, depending on how much you earn.
  • The tax brackets are wider for married couples filing jointly than for single filers, so two people with the same combined income may owe different amounts depending on filing status.
  • You pay the higher rate only on the portion of income that falls into that bracket, not on your entire income.
  • Maryland also taxes certain types of income differently — capital gains, retirement income, and income from certain sources may have their own rules.
  • The dollar amounts in each bracket shift slightly each year, so checking the current year's brackets before filing ensures you use the right numbers.

How Maryland's brackets work in practice

The clearest way to understand progressive tax brackets is to walk through an example. Suppose you are a single filer in Maryland earning $75,000 in 2024. You do not multiply $75,000 by 4.75% (the bracket your income reaches). Instead, you calculate tax on each bracket separately.

Income from $0 to $1,000 is taxed at 2%. Income from $1,000 to $2,500 is taxed at 3%. Income from $2,500 to $10,000 is taxed at 4%. And so on, until your income reaches the bracket it falls into. Only the portion of your income that lands in each bracket gets that bracket's rate. This is why your actual tax bill is lower than the top bracket rate you reach.

The Maryland Department of Revenue publishes the exact bracket amounts each year on its website. If you file taxes yourself, you can find these numbers in the state tax forms and instructions. If you use tax software or work with a tax preparer, the brackets are usually built in automatically.

Special tax rules for certain types of income

Maryland does not tax all income the same way. Long-term capital gains — profit from selling stocks, real estate, or other investments you held for more than a year — are taxed at a lower rate than ordinary income. This rate is currently 5.75%, which is the same as the top bracket, but the calculation is separate from your regular income.

Retirement income has its own rules. If you are over 65, Maryland allows a deduction on certain retirement income, including Social Security and some pension income. This deduction reduces the amount of income subject to tax. The exact amount depends on your age and total income, so you may owe less tax than someone younger earning the same amount.

Income from certain sources — such as interest on U.S. Treasury bonds or income earned by nonresidents outside Maryland — may be treated differently. If you have investment income, retirement withdrawals, or income from multiple states, the tax calculation becomes more complex, and you may want to review the state's tax guide or speak with a tax preparer.

Filing status and how it affects your tax rate

Your filing status changes the width of each tax bracket, which directly affects how much tax you owe. Single filers have the narrowest brackets. Married filing jointly have wider brackets — roughly double in many cases — so a married couple can earn more before reaching a higher tax rate. Married filing separately uses the same brackets as single filers, so it usually results in a higher combined tax bill for a couple.

Head of household filers — typically unmarried people supporting dependents — get brackets between single and married filing jointly. The difference in brackets between filing statuses can amount to hundreds or thousands of dollars in tax, so choosing the right status matters.

Your filing status is determined on December 31 of the tax year. If you got married, divorced, or had a major life change, make sure your filing status matches your situation. The Maryland tax forms walk through which status applies to you.

Local income taxes in Maryland

In addition to the state income tax, some Maryland counties and cities charge their own local income tax. Baltimore City has a local income tax of 3.2%. Several counties — including Anne Arundel, Howard, and Montgomery — also tax income. The local rate varies by location, ranging from about 1.25% to 3.2%.

If you live and work in the same county, you pay that county's local tax. If you work in a different county than where you live, the rules depend on the specific counties involved — some have reciprocal agreements, while others do not. Your employer usually withholds both state and local tax from your paycheck automatically.

When you file your state return, you also file a local return for the county where you live. The local tax is calculated separately from the state tax and uses its own rules, though the income reported is usually the same. If you moved during the year or worked in multiple counties, you may need to file in more than one jurisdiction.

Tax withholding and estimated payments

If you are an employee, your employer withholds Maryland state income tax from your paycheck based on the W-4 form you fill out. The withholding is an estimate of what you will owe at tax time. If your withholding is too high, you get a refund. If it is too low, you owe money when you file.

You can adjust your withholding at any time by submitting a new W-4 to your employer. If you expect a major change in income — a raise, a second job, marriage, or a child — updating your W-4 helps you avoid a large refund or a bill at tax time. The Maryland Department of Revenue website has a withholding calculator to help you figure out the right amount.

If you are self-employed or have income that is not subject to withholding, you may need to make estimated tax payments four times a year. These payments cover both state and federal taxes. Missing estimated payments can result in penalties, even if you ultimately owe no tax.

Where to find current Maryland tax rates and forms

The Maryland Department of Revenue maintains the official tax rates, brackets, and forms on its website at marylandtaxes.gov. The site includes the current year's tax brackets, instructions for each form, and answers to common questions. You can also read forms directly from there or request them by mail.

If you need help understanding your specific situation, the Department of Revenue has a phone line and email support. Many public libraries in Maryland also offer free tax help during tax season through the Volunteer Income Tax information (VITA) program, which serves people with lower incomes. Tax software companies like TurboTax and H&R Block also include Maryland-specific guidance.

Frequently Asked Questions

Does Maryland tax Social Security income?

Maryland does not tax Social Security benefits. However, if you have other income in addition to Social Security, that other income is taxed normally. If you are over 65, you may also be able to deduct a portion of certain retirement income, which reduces your taxable income further.

What is the difference between state tax and local tax in Maryland?

State tax goes to the Maryland state government and is the same rate for everyone in the state, based on income brackets. Local tax goes to your county or city and varies by location — Baltimore City charges 3.2%, while other counties charge different amounts. Both are calculated on your income, and you pay both if you live in a county that has a local tax.

If I move to Maryland mid-year, do I pay the full year's tax?

No. You only pay Maryland tax on income you earned while living in Maryland. If you moved from another state, you file a part-year resident return showing income earned before and after your move. You may also owe tax to your previous state on income earned there. Both states' tax forms include instructions for part-year residents.

Can I deduct federal taxes from my Maryland state tax?

No. Maryland taxes your income before federal taxes are subtracted. However, you can deduct certain expenses — such as contributions to retirement accounts or education savings plans — which reduces your taxable income for both state and federal purposes.

What happens if I do not withhold enough tax during the year?

If your withholding is too low, you will owe money when you file your return. You may also owe a penalty for underpayment, though the penalty is waived if you paid at least 90% of your current year tax or 100% of your prior year tax through withholding and estimated payments. Updating your W-4 during the year can help you avoid this situation.