Maryland state tax: Overview
Maryland's state income tax brackets don't reach 6%, but counties can impose their own tax rates. And while the lowest Maryland state income tax rate is 2%, workers with more than $3,000 of taxable income could pay at least 4.75%.
Gas taxes are high in Maryland, too. And the state has both an inheritance and an estate tax. However, Maryland offers property tax credits to eligible residents and doesn't tax Social Security retirement income.
[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.]
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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 Tax on Retirement Benefits: Social Security retirement benefits and Railroad Retirement benefits are tax-exempt. Residents 65 or older may be able to exclude some forms of qualified retirement income.
For 2024, Maryland's maximum pension exclusion is $31,100.
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
Maryland tobacco taxes
| Product | Tax Amount |
|---|---|
| Cigarette | $2 per pack |
| Cigars | 70% of wholesale price |
| Tobacco/Snuff | 30% of wholesale price |
Source: Sales Tax Handbook
Maryland alcohol taxes
| 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.
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