Maryland Income
Tax Rates & Rules

Maryland Income Tax at a Glance

Maryland levies a graduated state income tax with 2026 rates running from 2 percent up to 6.5 percent on taxable income above $1,000,000 for single filers or $1,200,000 for joint filers. Unlike most states, Maryland also requires every county and Baltimore City to impose its own local income tax, collected alongside the state return rather than filed separately, so the rate that actually applies to a Maryland paycheck is always state plus county.

How Maryland Income Tax Works

Maryland's state tax uses ten graduated brackets, taxing only the income that falls within each bracket rather than the entire income at one rate. Layered on top of the state calculation is a local income tax set by the county, or Baltimore City, where you live rather than where you work, using a flat rate that varies by jurisdiction. Both amounts are calculated together on the same Form 502 return, with the local tax reported as a separate line rather than a separate filing.

2026 Maryland Tax Brackets

For single filers, Maryland's brackets run 2 percent up to $1,000, 3 percent up to $2,000, 4 percent up to $3,000, 4.75 percent up to $100,000, 5 percent up to $125,000, 5.25 percent up to $150,000, 5.5 percent up to $250,000, 5.75 percent up to $500,000, 6.25 percent up to $1,000,000, and 6.5 percent above that. Joint filers and heads of household see the same rate progression at higher thresholds, with the top 6.5 percent bracket beginning at $1,200,000. The two highest brackets were newly added by the state's 2025 legislative session and first apply to tax year 2025 and beyond.

Maryland Standard Deduction

Maryland's standard deduction for 2026 is capped at $3,350 for single filers and other individual taxpayers, and $6,700 for those filing jointly, as head of household, or as a qualifying surviving spouse. These maximum amounts were raised from the previous $2,800 and $5,600 caps under 2025 legislation, which also eliminated the prior income-based phase-in so the full deduction is no longer reduced for higher earners.

How Maryland Income Tax Is Withheld From a Paycheck

Employers withhold Maryland tax from wages using Comptroller-published withholding tables or a percentage method that accounts for both the graduated state rate and the local rate tied to the employee's county of residence, as reported on Form MW507. Because local rates differ by jurisdiction, two employees earning identical wages but living in different Maryland counties will have different total state-plus-local amounts withheld from each paycheck. Nonresident employees have a special flat 2.25 percent rate substituted for the local-tax component of their withholding. The effect of Maryland withholding on take-home pay is easier to see through a Maryland paycheck calculator.

Who Has to File a Maryland State Income Tax Return?

Maryland requires a state return from residents whose gross income meets the same minimum filing thresholds tied to the federal standard deduction, adjusted by filing status and age. Nonresidents who earn Maryland-source income, including wages, business income, or gambling winnings, are held to the same minimum filing levels and must file even if they live and are taxed elsewhere on the rest of their income. Part-year residents file as residents for the portion of the year they lived in Maryland and as nonresidents for the remainder.

Does Maryland Tax Remote Workers and Nonresidents?

Nonresidents pay Maryland tax only on Maryland-source income and are charged a flat special nonresident rate of 2.25 percent in place of the county tax that residents pay, layered on top of the same graduated state brackets. This matters for remote employees: if you live outside Maryland but perform work for a Maryland employer, or live in Maryland while working remotely for an out-of-state employer, sourcing rules and any applicable reciprocity agreement determine which state actually taxes the pay. Maryland has a reciprocity agreement with the District of Columbia, Virginia, West Virginia, and Pennsylvania for wage income.

Does Maryland Tax Capital Gains Differently?

Capital gains are generally taxed as ordinary income under the standard state brackets, but a 2025-enacted 2 percent surcharge now applies to net capital gains for filers with federal adjusted gross income over $350,000. Exemptions apply to primary-residence sales under a set threshold, retirement-account assets, farm and ranch livestock sales, conservation-easement land sales, and certain nonprofit affordable housing transactions.

Maryland Income Tax vs. Payroll Taxes

Maryland income tax is only one tax connected with a paycheck. Employees can also have federal income tax, Social Security, and Medicare associated with their wages. A Maryland pay stub can show gross earnings, Maryland state and county income tax withholding, federal payroll taxes, other deductions, and net pay for the relevant pay period.

Need to Organize Your Payroll Records?

Accurate payroll records make it easier to review gross wages, tax withholding, deductions, and net pay. If you need to turn genuine payroll information into an itemized document, you can use our paystub maker to organize the information and create a professional pay stub. Online PayStub is intended for lawful payroll, business, and recordkeeping purposes.