state tax

Maryland State Tax Guide

State tax rates and rules for income, sales, property, fuel, cigarette, and other taxes that impact Maryland residents.

Bottom Line

Middle-Class Families: Least Tax-Friendly (Go to the Kiplinger Tax Map for Middle-Class Families)
Retirees: Not Tax-Friendly (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.

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 most 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 2021 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). The exclusion amount for the 2022 tax year is not available yet.

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 $1,078 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.

Most Popular

The 11 Most Expensive Cities in the U.S.
real estate

The 11 Most Expensive Cities in the U.S.

From metro areas on both coasts to the middle of the Pacific Ocean, these are the priciest cities in the U.S. to call home.
August 9, 2022
Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021
You'll Save More on Green Home Improvements Under the Inflation Reduction Act
Tax Breaks

You'll Save More on Green Home Improvements Under the Inflation Reduction Act

Tax credits for energy-efficient home improvements will be extended and expanded by the Inflation Reduction Act.
August 12, 2022

Recommended

New York State Tax Guide
state tax

New York State Tax Guide

State tax rates and rules for income, sales, property, fuel, cigarette, and other taxes that impact New York residents.
August 14, 2022
New Abortion Law Changes Tax Deductions
Tax Breaks

New Abortion Law Changes Tax Deductions

Georgia's abortion law could change the way that some states and people think about dependent tax deductions.
August 11, 2022
Will a Gas Tax Holiday or Suspension Lower Gas Prices Near You?
Tax Breaks

Will a Gas Tax Holiday or Suspension Lower Gas Prices Near You?

One way to bring down the price of gasoline is to establish a gas tax holiday. But will Uncle Sam, or your state government, suspend the gas taxes tha…
August 9, 2022
Tax-Free Weekend for Back-to-School Shopping
Tax Breaks

Tax-Free Weekend for Back-to-School Shopping

Fight inflation with a tax-free weekend. Twelve states are holding (or starting) sales tax holidays this weekend!
August 5, 2022