Maryland Tax Guide
Explore Maryland's state tax rates for income, sales, property, retirement, and more. Learn how Maryland compares nationwide.
Navigating the complexities of state taxes can be daunting, but understanding Maryland's tax landscape is essential for residents and newcomers alike.
In this guide, we'll explore key components of The Free State's tax system, from income and sales taxes to property taxes and retirement benefits.
Maryland state tax: Overview
Maryland might not have high state income tax rates on paper, but there's more to the story.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Each county can add its own tax rate, which means your actual bill could be higher than you'd expect. Even those earning just over $3,000 in taxable income can end up paying at least 4.75%.
Gas prices aren't exactly a break either, thanks to hefty fuel taxes. And unlike many states, Maryland has both an inheritance tax and an estate tax.
But there is good news. The state offers property tax credits for those who qualify, and if you rely on Social Security for retirement income, you're in luck because Maryland doesn’t tax it.
Related: Maryland Property Tax Assessment: What It Means for You
[Data for this state tax guide was gathered from several sources including the U.S. Census Bureau, the state’s government website, the Sales Tax Handbook, and the Tax Foundation. Property taxes are cited as a rate percentage rather than the assessed value.]
Maryland income tax
Maryland has a graduated state individual income tax rate that ranges from 2% to 5.75%, according to the Tax Foundation.
Maryland retirement taxes
Maryland taxes some retirement income, and localities can tax your income.
However, there is a pension exclusion of up to $39,500 for retirees age 65 and older. Maryland has both an estate and an inheritance tax.
The estate tax exemption is $5 million. However, the inheritance tax is mostly exempt for lineal descendants and ascendants, and 10% for most others.
- Social Security: Not taxable
- Pensions: Partially taxed (due to pension exclusion)
- 401(k) and IRA Distributions: Taxable
Maryland sales tax
Maryland's state sales tax is 6%, according to the Tax Foundation
Groceries: Exempt
Clothing: Taxable
Motor Vehicles: Exempt
Prescription Drugs: Exempt
How much are property taxes in Maryland?
In Maryland, the average effective property tax rate is 0.95%.
Source: Tax Foundation
Maryland property tax breaks for retirees
Local governments can establish a property tax deferral program that allows Maryland residents 65 or older to defer the increase in their tax bill for county taxes. The deferred taxes become a lien on the property and must be repaid when the property is transferred.
Maryland's Renters' Tax Credit program provides up to $1,000 annually for qualifying residents. Income limits apply, but the credit is not limited to renters over age 65.
Maryland gas tax
Gasoline: $0.33 per gallon
Diesel: $0.33 per gallon
Source: Sales Tax Handbook
Maryland taxes on alcohol and tobacco
Product | Tax Amount |
|---|---|
Cigarette | $2 per pack |
Cigars | 70% of wholesale price |
Tobacco/Snuff | 30% of wholesale price |
Source: Sales Tax Handbook
Product | Tax Amount |
|---|---|
Wine | $0.40 per gallon |
Beer | $0.09 per gallon |
Liquor | $1.50 per gallon |
All alcohol has an additional sales tax of 9%.
Source: Sales Tax Handbook
Maryland estate and inheritance taxes
Maryland has estate and inheritance taxes ('Death Taxes'). Maryland's estate exemption is $5 million, so you don't need to worry about paying this tax if your estate is valued under that amount.
However, Maryland's inheritance tax, which is 10% of the clear value (fair market value minus qualified expenses), applies to some heirs when the value of the property exceeds $1,000. Many descendants (including but not limited to spouses and children) are exempt from paying inheritance taxes in Maryland.
Related Content
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Katelyn has more than 6 years of experience working in tax and finance. While she specialized in tax content while working at Kiplinger from 2023 to 2024, Katelyn has also written for digital publications on topics including insurance, retirement, and financial planning and had financial advice commissioned by national print publications. She believes knowledge is the key to success and enjoys providing content that educates and informs.
-
The Top 10 Side Gigs For Retirees In 2026Money is freedom in retirement; here’s how to earn more of it with a profitable side gig
-
3 Retirement Changes to Watch in 2026: Tax EditionRetirement Taxes Between the Social Security "senior bonus" phaseout and changes to Roth tax rules, your 2026 retirement plan may need an update. Here's what to know.
-
The 'Yes, And...' Rule for RetirementRetirement rarely follows the script. That’s why the best retirees learn to improvise.
-
3 Retirement Changes to Watch in 2026: Tax EditionRetirement Taxes Between the Social Security "senior bonus" phaseout and changes to Roth tax rules, your 2026 retirement plan may need an update. Here's what to know.
-
Tax Season 2026 Is Here: 8 Big Tax Changes to Know Before You FileTax Tips Due to several major tax rule changes, your 2025 return might feel unfamiliar even if your income looks the same.
-
Do You Pay Property Taxes in Tennessee? What You Need to Know in 2026Property Taxes State lawmakers are moving to ban state property taxes, but can they stop the local rate spike? Here's how 2026 could lower your Tennessee property tax bill.
-
12 Tax Strategies Every Self-Employed Worker Needs in 2026Your Business Navigating the seas of self-employment can be rough. We've got answers to common questions so you can have smoother sailing.
-
New California Wealth Tax for 2026? Here's What's Happening NowState Taxes California has considered taxing wealth before, but the latest proposal seems to be different.
-
A Free Tax Filing Option Has Disappeared for 2026: Here's What That Means for YouTax Filing Tax season officially opens on January 26. But you'll have one less way to submit your tax return for free. Here's what you need to know.
-
Georgia Tax Rebate And Income Elimination? What 2026 Could Mean For YouState Tax We break down how lawmakers aim to axe the state income tax and how much you could get in a Georgia tax refund in 2026.
-
When Do W-2s Arrive? 2026 Deadline and 'Big Beautiful Bill' ChangesTax Deadlines Mark your calendar: Feb 2 is the big W-2 release date. Here’s the delivery scoop and what the Trump tax changes might mean for your taxes.