Disclaimer: Calculations are estimates based on tax rates as of Jan. 2023 and data from the Tax Foundation. These rates are subject to change. Check the IRS website for the latest information about income taxes and your state tax website for state-specific information. Our calculator doesn’t consider both 401k and IRA deductions due to the tax law limitations. Please note, the amount of your IRA deductions may vary. You should speak with a tax professional to determine your tax situation.
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What You Need To Know About Maryland State Taxes
The state of Maryland requires you to pay taxes if you are a resident or nonresident that receives income from a Maryland source. The state income tax rates range from 2% to 5.75%, and the sales tax rate is 6%.
Maryland offers tax deductions and credits to reduce your tax liability, including a standard deduction, itemized deduction, the earned income tax credit, child and dependent care credit and college savings tax deduction.
Maryland Income Tax Brackets and Rates: Single or Filing Separately
If your Maryland taxable income is over: | But not over: | Your tax is: |
---|---|---|
$0 | $1,000 | 2% of your income |
$1,00 | $2,000 | $20 plus 3% of the excess over $1,000 |
$2,000 | $3,000 | $50 plus 4% of the excess over $2,000 |
$3,000 | $100,000 | $90 plus 4.75% of the excess over $3,000 |
$100,000 | $125,000 | $4,697.50 plus 5% of the excess over $100,000 |
$125,000 | $150,000 | $5,947.50 plus 5.25% of the excess over $125,000 |
$150,000 | $250,000 | $7,260.00 plus 5.5% of the excess over $150,000 |
$250,000 | $12,760.00 plus 5.75% of the excess of $250,000 |
Maryland Income Tax Brackets and Rates: Joint Returns, Head of Household, and Qualifying Widows/Widowers
If your Maryland taxable income is over: | But not over: | Your tax is: |
---|---|---|
$0 | $1,000 | 2% of your income |
$1,00 | $2,000 | $20 plus 3% of the excess over $1,000 |
$2,000 | $3,000 | $50 plus 4% of the excess over $2,000 |
$3,000 | $150,000 | $90 plus 4.75% of the excess over $3,000 |
$150,000 | $175,000 | $7,072.50 plus 5% of the excess over $150,000 |
$175,000 | $225,000 | $8,332.50 plus 5.25% of the excess over $175,000 |
$225,000 | $300,000 | $10,947.50 plus 5.5% of the excess over $225,000 |
$300,000 | And over | $15,072.50 plus 5.75% of the excess over $300,000 |
Income Tax Deductions for Maryland
Standard Deduction
The state of Maryland offers a standard and itemized deduction for taxpayers. The 2021 standard deduction allows taxpayers to reduce their taxable income by up to $2,350 for single filers and up to $4,700 for taxpayers filing jointly, head of household or qualifying widows/widowers.
Itemized Deductions
Maryland taxpayers may choose to itemize their deductions if they also did so on their federal return. However, taxpayers who itemized their federal deductions are not required to use itemized deductions on their Maryland income tax return.
Child Care Deduction
Taxpayers with child dependents can subtract the cost of child care, up to $3,000 ($6,000 for two or more dependents receiving care).
Adoption Expenses Deduction
Taxpayers who adopt a child through a public or nonprofit agency can deduct up to $5,000 in expenses. Taxpayers who adopt a child with special needs can deduct up to $6,000 in expenses.
College Savings Deduction
Taxpayers who contributed to a Maryland College Investment Plan account can deduct up to $2,500 per beneficiary. If you purchased advanced tuition payments to the Maryland Prepaid College Trust, you may deduct up to $2,500 per contract.
Classroom Supplies Deduction
Full-time kindergarten through 12th-grade classroom teachers may subtract up to $250 in unreimbursed classroom supplies.
First-Time Homebuyer Savings Deduction
Taxpayers who contributed to a First-Time Homebuyer Savings Account may deduct up to $5,000 of the amount contributed per year. Interest may be included in that deduction. You can claim this deduction for up to 10 years, and for no more than $50,000 in that period.
Charitable Donation Deduction
The value of donations of some disposable diapers and personal hygiene products to charitable organizations may be deductible
Unemployment Compensation Deduction
Taxpayers who received unemployment compensation from the Maryland Department of Labor can deduct the amount as long as their federal adjusted gross income (AGI) doesn’t exceed $75,000 ($100,000 for a married couple filing jointly, head of household filer, or surviving spouse).
Maryland State Income Tax Credits
Earned Income Tax Credit
You can claim the Maryland Earned Income Tax Credit if you claimed the EITC on your federal return.
The federal EITC income cap ranges from $21,430 to $57,414 depending on how you file and how many children or relative dependents you claim. The maximum federal EITC amount you can claim on your 2021 tax return is $6,728.
If you are a married couple filing separately or jointly, or you have at least one qualifying child, you can claim 50% of the federal credit on your Maryland tax return. If you are a single filer, head of household, or surviving spouse without a qualifying child, you may claim the full amount of the federal EITC.
If your Maryland EITC is higher than your Maryland tax, you may be eligible for a refund.
The Child and Dependent Care Credit
You may be able to claim the child and dependent care credit if you paid someone to care for your child, a dependent or spouse. You must have claimed this credit on your federal tax return to claim it on your Maryland return. The credit may be refundable if your federal adjusted gross income is $52,100 or less ($78,150 or less for joint filers).
Long-Term Care Insurance Credit
Taxpayers who pay a premium toward a long-term care insurance policy for themselves or a Maryland family member may be eligible for a one-time credit on their Maryland tax return. The credit is $400 for policies for someone age 40 or less, and $500 for a policy for someone over 40.
Student Loan Debt Relief Tax Credit
Student loan borrowers who have incurred more than $20,000 in student loan debt may be eligible for a refundable tax credit. The maximum value of the credit is $5,000. Borrowers must apply for the tax credit with the Maryland Higher Education Commission by Sept. 15 of each year.
Maryland Child Tax Credit
Taxpayers with federal adjusted gross income of $6,000 or less may claim a refundable credit of $500 for each qualifying child (generally, dependents under age 17).
Renters’ Tax Credit
Maryland offers a tax credit of up to $1,000 per year for renters age 60 and up or 100% disabled. Some residents with dependent children may also be eligible for a credit. Income restrictions apply, and applications for the program must be submitted by October of each year.
Do I Have to Pay Income Tax in Maryland?
You are required to file a Maryland tax return if you are a full- or part-time resident of the state, and you are required to file a federal income tax return. If you aren’t a resident but had income from a Maryland source, you must file a nonresident tax return (form 505 or 515).
You may also have to pay local income tax set by your county.
Related: Maryland Income Tax Calculator
Sales Tax and Sales Tax Rates
Maryland charges sales taxes of 6%.
Property Taxes and Property Tax Rates
Property taxes are determined at the county and municipality level.
Property Tax Credit
Maryland provides property tax credit for some homeowners based on their income. Your net worth, not including property value or qualified retirement savings, must be less than $200,000, and your gross household income can’t be more than $60,000. After a homeowner applies for the Homeowners’ Tax Credit, the credit is calculated automatically and issued as a deduction on the July property tax bill.
Capital Gains Taxes
Maryland taxes capital gains as ordinary income.
Inheritance and Estate Tax and Inheritance and Estate Tax Exemption
Maryland has an estate tax and an inheritance tax.
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