Bottom Line
Middle-Class Families: Least Tax-Friendly (Go to the Kiplinger Tax Map for Middle-Class Families)
Retirees: Mixed Tax Picture (Go to the Kiplinger Tax Map for Retirees)
Residents of the Old Line State can get crabby when they see how much they pay in state and local income taxes. Part of the problem is that Maryland's 23 counties and Baltimore City each levy their own income taxes.
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But Marylanders don't get quite so steamed when it comes to sales tax, since the state is actually somewhat friendly to shoppers. There's a 6% state sales tax, but that's it – there are no additional local sales taxes to pay.
The statewide median property tax rate is right around the national average, which helps. But the moderate sales and property taxes aren't enough to balance out the state's high income taxes for many people. Plus, Maryland is also the only state with both an estate tax and an inheritance tax.
Maryland Income Taxes
Maryland Income Tax Range
Low: 2% (on less than $1,000 of taxable income)
High: 5.75% (on more than $250,000 of taxable income for single filers; more than $300,000 for joint filers)
Maryland counties and Baltimore City levy additional income taxes.
Maryland Taxation of Social Security Benefits
Social Security benefits are not taxed by the state.
Maryland Tax Breaks for Other Retirement Income
For the 2022 tax year, taxpayers age 65 and older can exclude up to $34,300 of federally-taxed income from an employee retirement plan (e.g., a pension or 401(k) plan, but not an IRA).
Retired correctional officers, police officers, firefighters, rescue workers, emergency services personnel, forest rangers, park rangers, and wildlife rangers age 55 to 64 can exclude up to $15,000 of federally-taxed income from an employee retirement plan.
Beginning with the 2022 tax year, single residents who are at least 65 years old with a federal adjusted gross income of $100,000 or less can claim a $1,000 tax credit. The credit amount is $1,750 for joint filers, surviving spouses, and head-of-household filers 65 or older with a federal AGI of $150,000 or less ($1,000 if only one spouse for a couple filing a joint return is eligible). The credit amount can be reduced in future years if revenue estimates are lowered by a certain amount.
Also starting in 2022, anyone who is at least 100 years old can exclude up to $100,000 of income from tax.
Up to $15,000 of income from a military retirement plan is exempt for taxpayers age 55 or older ($5,000 for taxpayers under age 55).
Railroad Retirement benefits are fully exempt.
Maryland Sales Tax
6% state levy. No local taxes.
- Groceries: Exempt
- Clothing: Taxable
- Motor Vehicles: Exempt from ordinary sales tax, but taxable under special 6% excise tax
- Prescription Drugs: Exempt
Maryland Real Property Taxes
In Maryland, the median property tax rate is $987 per $100,000 of assessed home value.
Maryland Property Tax Breaks for Retirees
Local governments can establish a property tax deferral program that allows 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.
Some localities are also authorized to provide property tax credits to residents age 65 or older.
A Renters' Tax Credit program provides up to $1,000 a year for qualifying residents. Requirements are relaxed for renters age 60 and older. Income limits apply.
Maryland Motor Fuel Taxes
Gasoline: 36.1¢ per gallon.
Diesel: 36.85¢ per gallon.
Maryland Sin Taxes
Cigarettes: $3.75 per pack
Premium cigars: 70% of the wholesale price
Non-premium cigars: 15% of the wholesale price
Pipe Tobacco: 30% of the wholesale price
Other tobacco products: 53% of the wholesale price
Vapor products: 12% sales tax on electronic smoking devices, and 60% sales tax on vaping liquid sold in a container of 5 milliliters or less; no statewide excise tax, but county taxes may apply if they were imposed on or before January 1, 2020.
Beer: $0.09 per gallon
Wine: $0.40 per gallon
Liquor: $1.50 per gallon
A 9% sales tax is also levied.
Maryland Estate and Inheritance Taxes
Maryland's estate tax exemption is $5 million, plus any predeceased spouse's unused exclusion amount. Rates range from 0.8% to 16%.
While Maryland also has an inheritance tax (with a flat 10% rate), the list of heirs exempt from paying it includes the decedent's spouse, parents, grandparents, children, grandchildren, siblings, son-in-law, daughter-in-law and surviving spouse of a deceased child. In addition, property not exceeding $1,000 passing to any one person is not subject to the tax.
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