What Is the Income Tax Rate in Maryland?
Understand Maryland's income tax rates, including state brackets, local surcharges, and deductions, to better navigate your tax obligations.
Maryland residents and workers are subject to both state and local income taxes, which impact take-home pay. Unlike states with a flat tax, Maryland uses a progressive system where higher incomes face higher rates. Counties also impose surtaxes, making the overall tax burden vary by location.
State Tax Brackets
Maryland’s progressive tax system increases rates as taxable income rises. For 2024, rates range from 2% to 5.75%. The lowest rate applies to income up to $1,000, while the highest applies to income exceeding $250,000 for single filers and $300,000 for joint filers.
Between these amounts, rates rise incrementally. Income from $1,001 to $2,000 is taxed at 3%, from $2,001 to $3,000 at 4%, with further increases to 4.75%, 5%, and 5.25%. The 5.5% rate applies to income from $150,001 to $250,000 for single filers before reaching the top rate.
Maryland’s tax brackets are not adjusted for inflation, meaning wage increases can push taxpayers into higher brackets, raising their tax burden even if purchasing power remains unchanged. Unlike federal tax brackets, which adjust annually for inflation, Maryland’s fixed thresholds can lead to “bracket creep.”
Local Surcharges
Beyond state income tax, Maryland counties and Baltimore City impose local income taxes, ranging from 2.25% to 3.20% in 2024. Worcester County has the lowest rate, while Howard, Montgomery, and Prince George’s Counties have the highest.
Because these taxes are percentage-based, they scale with income. A taxpayer earning $100,000 in Montgomery County would owe $3,200, while someone with the same income in Worcester County would pay $2,250. This variation makes location an important factor in tax planning.
Unlike the state’s progressive system, local taxes apply at a flat rate to all taxable income. This means lower-income earners may feel a greater relative burden than higher earners.
Filing Status Impacts
Maryland follows federal filing statuses: Single, Married Filing Jointly, Married Filing Separately, and Head of Household. Filing status affects tax calculations, including bracket thresholds and eligibility for credits. Joint filers benefit from higher income limits before reaching the top tax rate, while those filing separately may face a higher effective tax burden due to reduced deductions and credits.
Head of Household status provides lower tax rates for single parents or those supporting a dependent. A Head of Household filer earning $50,000 generally owes less than a Single filer with the same income due to more favorable bracket thresholds. However, strict dependency requirements must be met to qualify.
Maryland requires married couples filing separately to either both itemize or both take the standard deduction—one cannot itemize while the other takes the standard deduction. This can be disadvantageous if one spouse has significant deductions while the other does not.
Deduction Options
Maryland taxpayers can reduce taxable income through the standard deduction or itemized deductions. The standard deduction is a percentage of income with set minimum and maximum limits. For 2024, it ranges from $1,700 to $2,550 for Single filers and $3,400 to $5,100 for Married Filing Jointly. Unlike the federal standard deduction, which is a fixed amount, Maryland’s deduction scales with income but is capped, limiting its benefit for higher earners.
Itemizing may provide greater tax savings for those with significant deductible expenses. Maryland allows deductions for medical expenses exceeding 7.5% of adjusted gross income, mortgage interest, and state and local taxes, capped at $10,000 for married filers and $5,000 for single filers. Charitable contributions are deductible only if itemizing. Unlike federal rules, Maryland does not allow a deduction for qualified business income (QBI), affecting small business owners and self-employed individuals.
Nonresident Requirements
Maryland taxes both residents and nonresidents who earn income within the state, including wages from Maryland-based employment, rental income, and business earnings. Nonresidents must file a Maryland tax return if their Maryland-sourced income exceeds the state’s standard deduction limits.
A separate nonresident tax applies in addition to state income tax rates. For 2024, this tax is 1.75% of taxable income, functioning as a substitute for the local county tax that residents pay. A nonresident earning $50,000 in Maryland would owe state income tax based on the progressive brackets, plus an additional $875 due to the nonresident tax.
Maryland has reciprocity agreements with Pennsylvania, Virginia, West Virginia, and Washington, D.C., preventing double taxation for residents of these areas who work in Maryland. Under these agreements, qualifying individuals pay income tax only to their home state. However, this does not apply to self-employed individuals or those earning non-wage income, such as rental or business income, which remains taxable in Maryland. Those without reciprocity must typically claim a credit for taxes paid to Maryland on their home state return to avoid double taxation.