Maryland does not tax Social Security benefits

If you receive Social Security in Maryland, the state will not tax those benefits. Maryland's tax code specifically excludes Social Security income from state income tax, regardless of how much you receive or your total household income. This applies to retirement benefits, survivor benefits, and disability benefits paid by Social Security.

However, your federal tax situation is separate. The federal government may tax part of your Social Security benefits depending on your combined income—even though Maryland will not. You will still file a federal return if your income crosses certain thresholds, but you will owe nothing to Maryland on the Social Security portion.

Key Takeaways

  • Maryland does not tax Social Security retirement, survivor, or disability benefits under state law.
  • The federal government may still tax part of your Social Security if your combined income exceeds certain limits, but Maryland will not.
  • You do not need to report Social Security income on your Maryland state tax return.
  • Other retirement income—such as pensions, 401(k) withdrawals, or IRA distributions—may be taxable in Maryland depending on the source.

How Maryland treats different types of retirement income

Social Security is tax-free in Maryland, but other retirement income is not always treated the same way. Pensions from federal, state, or local government employment are fully exempt from Maryland income tax. Military pensions also receive this exemption. However, pensions from private employers are taxable in Maryland.

Withdrawals from traditional IRAs and 401(k) plans are taxable as ordinary income in Maryland. Roth IRA withdrawals are not taxable because you already paid tax on the money when you contributed it. If you have a mix of retirement income sources, only the Social Security portion gets the full exemption.

Interest, dividends, and capital gains from investments are also taxable in Maryland, even if you are retired. The state does not offer a blanket exemption for retirees—only for specific income types like Social Security and certain pensions.

Federal taxation of Social Security benefits

Even though Maryland will not tax your Social Security, the federal government may. The IRS uses a formula based on your "combined income," which includes half of your Social Security benefits plus all other income (wages, interest, dividends, pensions, and certain other sources).

If your combined income is below $25,000 (single) or $32,000 (married filing jointly), you will not owe federal tax on any Social Security benefits. If it exceeds those thresholds, up to 50 percent of your benefits may be taxable. If your combined income is very high, up to 85 percent of your benefits may be taxable.

This federal rule applies to everyone, regardless of which state you live in. Maryland's exemption does not change your federal obligation. You will report your Social Security income on your federal return (Form 1040) if you are required to file, but you will leave it off your Maryland return.

When you need to file a Maryland state return

You must file a Maryland state income tax return if your gross income exceeds the filing threshold for your age and filing status. For 2024, a single person under 65 must file if income exceeds $15,000. A single person 65 or older must file if income exceeds $18,500. Married couples filing jointly have higher thresholds.

Social Security income does not count toward these thresholds in Maryland because it is not taxable. However, other income does. If your only income is Social Security, you will not need to file a Maryland return. If you have wages, a pension, or other taxable income, you may need to file even if your Social Security is substantial.

Even if you are not required to file, you may want to file anyway if taxes were withheld from other income sources. Filing allows you to claim a refund of any overpayment.

How to report Social Security on your Maryland return

If you file a Maryland return, Social Security benefits do not appear on it. You will report only your taxable income—wages, pensions, interest, dividends, and other sources that Maryland taxes. The Maryland Form 502 (the state income tax return) does not have a line for Social Security income because it is not taxable.

You will still receive a Social Security Statement (Form SSA-1099) each January showing the total benefits you received in the previous year. Keep this for your records, but do not report the amount on your Maryland return. If you file a federal return, you will report it there using the information from the SSA-1099.

If you have questions about whether a specific income source is taxable in Maryland, the Maryland Department of Revenue publishes guidance on its website, or you can contact a tax professional who is familiar with Maryland law.

Frequently Asked Questions

Do I have to pay Maryland tax on my spouse's Social Security if we file jointly?

No. Maryland does not tax Social Security benefits for either spouse, regardless of filing status. If you file a joint return, neither your Social Security nor your spouse's counts as taxable income in Maryland.

What if I moved to Maryland after receiving Social Security in another state?

Your Social Security benefits are not taxed in Maryland, even if you received them while living elsewhere. The state you currently live in determines your state tax obligation. Once you move to Maryland, those benefits are exempt from Maryland tax going forward.

Are my Supplemental Security Income (SSI) payments taxed in Maryland?

SSI is a different program from Social Security retirement and disability benefits. SSI is also not taxed in Maryland. However, SSI has strict income and asset limits, so if you are receiving SSI, you should not have other substantial income anyway.

If Maryland does not tax Social Security, why do I need to report it on my federal return?

Federal and state taxes are separate systems with different rules. Maryland's decision not to tax Social Security does not affect federal law. The IRS taxes Social Security based on your combined income, so you must report it on your federal return if your income is high enough to trigger taxation.

Can I deduct my Maryland state taxes from my federal return if Social Security is not taxed here?

You can deduct state and local taxes (SALT) on your federal return only if you itemize deductions instead of taking the standard deduction. The amount you can deduct is capped at $10,000 per year. Whether you itemize depends on your total deductible expenses, not on whether Social Security is taxed in your state.