Maryland

Sales Tax

  • Statewide: 6.0%
  • Counties cannot levy an additional sales tax.
  • Common Exceptions at State Level:
    • Prescription Medicine: Exempt
    • Unprepared Foods: Exempt
  • Gasoline Tax: 54.50 cents/gallon (Includes all state, local and federal taxes)
  • Diesel Fuel Tax: 61.25 cents/gallon (Includes all state, local and federal taxes)
  • Cigarette Tax: $3.75/pack of 20

 

Personal Income Tax

  • Personal Income Tax Rate Range: Eight brackets from 2% to 5.75% (on income over $250,000)
  • Standard deduction: Single filing status: $2,300. Married Filing Jointly: $4,650.
  • Personal Exemption Allowance: $3,200 but declines based on income; phased out at $100,000.
  • Dependent Exemption: Same as Personal
  • Itemized Deductions Allowed?: Yes, subject to limitations
  • Retirement Income 
    • Social Security: Exempt
    • IRAs: Taxable at ordinary income tax rates*
    • 401Ks/Defined contribution employer retirement plans: Taxable at ordinary income tax rates*
    • Private pensions: Taxable at ordinary income tax rates*
    • Public Pensions: Taxable at ordinary income tax rates*
    • TAX CREDITS: An April 1, 2022, law provides a $1,000 tax credit to individual Maryland residents who are at least 65 years old on the last day of a taxable year and have less than $100,000 in retirement income. It provides a $1,750 tax credit to married couples with less than $150,000 in retirement income if both are at least 65 ($1,000 if only one is at least 65). These figures may be reduced for some taxpayers based on the state's general fund estimates. The credit takes effect for the 2022 tax year.
  • Military Pay
    • Active Duty Pay: Up to $15,000 may be exempt if total military pay is less than $30,000
    • Military Retirement Pay: May be eligible for $5,000 exclusion if under 55, $15,000 exclusion if over 55.
    • Military Disability Pay: Exempt
    • VA Disability Dependency & Indemnity Compensation Benefits: Exempt
    • SBP/SSBP/RCSBP/RSFPP: Taxable to the extent included in federal AGI
Income Tax Comments: *Retirement income may be eligible for pension exclusion of $33,100. Additional exemptions for first responders may be available. State allows county- and city-level income tax.

 

Property Tax

  • Local municipalities average 1.09% of the property's assessed value.
  • Calculation of assessed value: 100% of fair market value; increase phased in over three years; reassessed every three years
  • Relief programs for:
    • 65 and over: An increase in taxes from prior year may be deferred.
    • Homestead Tax Credit: May be eligible for credit if assessed value increases more than 10% over prior year.
    • Circuit Break Property Tax Deferral: Credit based on income which cannot exceed $60,000.
    • Disabled Veterans: Full exemption if 100% service-connected disability
  • Personal Property Tax: Yes, rates and exemptions are at the discretion of individual municipalities.

 

Inheritance & Estate Taxes: Property passing to a child or other lineal descendant, spouse of a child or other lineal descendant, spouse, parent, grandparent, stepchild or stepparent, siblings, or a corporation having only certain of these persons as stockholders is exempt from taxation, but a 10% inheritance tax on certain other individuals. A maximum 16% estate tax is imposed on estates over $5 million.

 

Department of Revenue website: www.marylandtaxes.gov

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