Annapolis local tax guide
Who pays Annapolis's local tax
Anyone living in Anne Arundel County, including Annapolis, Glen Burnie, Severna Park, and Odenton, pays the county's graduated tax on all Maryland taxable income. State employees who commute into the capital from Prince George's, Calvert, or Queen Anne's County pay their home county's rate instead. Midshipmen and military families stationed at the Naval Academy may be governed by federal residency protections for service members and spouses, which can leave them taxable only in their home state.
Anne Arundel County's graduated rates
Annapolis, the state capital with about 41,000 residents, has no city income tax. Anne Arundel County is one of two Maryland counties with graduated rates, and its brackets are marginal: each rate applies only to the income inside its band, so crossing $50,000 raises the rate on later dollars only.
For joint filers the bands are wider, with the 2.70% rate running to $75,000 and the 3.20% rate starting above $480,000. The county tax is figured on Form 502 with the state tax.
Worked example: $75,000 in Annapolis
A single filer on $75,000 has $68,400 of Maryland taxable income. Maryland tax is $3,197. The county charges 2.70% on the first $50,000 and 2.94% on the rest, for $1,891, an effective rate of 2.52% of salary. After $7,670 in federal tax, $4,650 for Social Security, and $1,088 for Medicare, take-home is $56,504.
With no local income tax, that worker would keep $58,395, so Anne Arundel residence costs $1,891. At $150,000 the county tax is $4,167, or 2.78% of salary. A commuter who works in Annapolis but lives in another county pays $0 to Anne Arundel.
How Annapolis compares
Anne Arundel's lower first band gives Annapolis the smallest local tax among the Maryland cities on this site. At $75,000 an Annapolis resident pays $298 less than a resident of Baltimore City, Columbia, Rockville, or Silver Spring, and $134 less than a Frederick resident.
That gap narrows as income rises, because more of each paycheck falls in the 2.94% band. Compare on the Baltimore calculator, the Columbia calculator, or the Maryland $75,000 page.
Withholding for Annapolis workers
Enter Anne Arundel County as your county of residence on Form MW507. Payroll withholds an estimate of the county tax based on that entry, and the exact graduated amount is settled on Form 502. Virginia, D.C., and West Virginia residents working at state agencies in Annapolis claim exemption from Maryland withholding on MW507 if they keep no Maryland home for 183 days or more.
Tips for Annapolis paychecks
Do not fear the $50,000 line
Anne Arundel's brackets are marginal, so a raise that pushes taxable income past $50,000 adds 2.94% only on the extra dollars.
Service members: check your domicile
Military pay and some spouses' wages may be taxed by your home state rather than Maryland. Confirm your status before listing Anne Arundel on MW507.
Pre-tax plans cut both taxes
Contributions to the Maryland state employee 457(b) or a 401(k) reduce Maryland taxable income and the county tax figured on it.