Maryland tax guide
Maryland's tax structure is designed as a progressive system, featuring eight tax brackets that top out at 5.75%. Unlike states with single tax rates, Maryland ensures that higher earners contribute a larger percentage of their income. This state-level tax is further layered with mandatory local income taxes, which vary depending on where you reside within the state.
Key tax highlights
Payroll
- Maryland imposes a progressive state income tax structure reaching a maximum rate of 5.75%.
- Local income taxes are mandatory and are levied by all 23 counties and Baltimore City, adding between 2.25% and 3.20% to your tax burden.
- Employers are required to withhold both state and local taxes from your paycheck based on the jurisdiction of your primary work location.
- The tax system is structured into eight distinct brackets, meaning your effective tax rate gradually increases as your income grows.
Local taxes
- Baltimore City maintains a local income tax rate of 3.20%, which is among the highest in the state.
- Residents in Frederick County pay a local tax rate of 2.96%, though rates vary significantly across Maryland's other jurisdictions.
- Unlike many states where local taxes are optional or rare, Maryland's local income tax is a standard component of every resident's tax bill.
Deductions
- Maryland offers a standard deduction that is calculated as a percentage of your Maryland adjusted gross income, subject to minimum and maximum limits.
- Residents can claim a personal exemption that is tiered based on the taxpayer's federal adjusted gross income.
- The state provides specific subtractions for retirement income, including certain military and public safety pensions, to reduce taxable income.
Salary examples
Pre-computed take-home estimates at common salary levels. For example, a $75,000 salary in Maryland yields about $58,082 after all deductions (77.4% take-home rate). Use the calculator above with your actual salary to see your specific estimate.
| Salary | Federal | State | FICA | Take-Home | Rate |
|---|---|---|---|---|---|
| $50,000 | $3,820 | $2,323 | $3,825 | $40,033 | 80.1% |
| $75,000 | $7,670 | $3,510 | $5,738 | $58,082 | 77.4% |
| $100,000 | $13,170 | $4,697 | $7,650 | $74,483 | 74.5% |
| $150,000 | $24,734 | $7,260 | $11,475 | $106,531 | 71.0% |
Neighboring states
How Maryland compares with border states on income tax. At a $75,000 salary, a Maryland worker pays $3,510 in state tax annually.
| State | Tax type | Top rate |
|---|---|---|
| Pennsylvania | flat tax | 3.07% |
| West Virginia | progressive | 4.82% |
| Virginia | progressive | 5.75% |
| Delaware | progressive | 6.60% |
| District of Columbia | high tax | 10.75% |
Cities with local taxes
These Maryland city pages factor local taxes into the take-home estimate. A city like Baltimore adds an extra local deduction on top of statewide withholding.
Tax tips for Maryland
- Review your local tax rate based on your specific county to ensure your employer is withholding the correct amount.
- Check if you qualify for the state’s tiered personal exemption by verifying your federal adjusted gross income.
- Leverage the Maryland-specific retirement income subtractions if you are receiving pension benefits to lower your overall liability.
- Calculate the impact of your specific county's local tax rate on your annual take-home pay using our detailed calculator.
Did you know?
- •Maryland is unique for being one of the few states where local income taxes are universal across all jurisdictions.
- •The state uses a tiered personal exemption system that effectively reduces the tax burden for lower-income taxpayers.
- •Maryland's progressive tax brackets have remained stable, but local jurisdictions frequently adjust their individual tax rates.
Filing guidance
When filing your Maryland return, you must account for both your state taxable income and the local income tax associated with your primary residence. Ensure your W-2 or pay stubs reflect the correct local tax code to avoid underpayment or overpayment during the annual tax filing cycle. If you moved within the state during the year, you may need to apportion your local tax liability based on the time spent in each jurisdiction.
Relocation context
Comparing Maryland with nearby states can reveal whether paycheck differences are driven by state tax, local tax, or payroll deductions.