Maryland state taxes at a glance
| Individual income tax | Graduated (bracket) income tax |
|---|---|
| Rate structure | Graduated state rates rising to 6.5% on the highest incomes, plus a county or Baltimore City income tax (2.25% to 3.30% in 2026 per the Comptroller). A 2% capital gains surtax applies above $350,000 AGI. Verify current-year figures. |
| Tax agency | Comptroller of Maryland |
| Main individual return | Form 502 (residents); Form 505 (nonresidents) |
| Local income taxes | Every Maryland resident pays a local income tax to their county or Baltimore City, set between 2.25% and 3.30% in 2026 per the Comptroller; most jurisdictions use a flat rate, but Anne Arundel and Frederick use bracketed rates. |
| Sales tax | A 6% state rate with no local sales taxes, though some items such as certain alcohol and cannabis have different rates. |
| Property tax | State and county governments levy property taxes; the Homestead Property Tax Credit limits annual taxable-assessment growth for owner-occupied homes, and applications go through the State Department of Assessments and Taxation. |
| Retirement & Social Security | Maryland does not tax Social Security but taxes most other retirement income, with a pension exclusion for people 65 and older or disabled, subject to a dollar cap. |
Verify current-year figures: state rates, brackets, credits and filing rules change. Treat this page as a starting orientation and confirm details on the Comptroller of Maryland website.
How Maryland income tax works
A Maryland tax bill has two parts: a state income tax and a local income tax paid to your county or Baltimore City. The state rates are graduated; Tax Foundation’s 2026 table shows rates from 2% rising to 6.5% above $1 million, after the legislature added 6.25% and 6.5% brackets retroactive to 2025. The local tax is calculated on Maryland taxable income and entered on Form 502 using the rate for your county of residence. For 2026 the Comptroller’s withholding guidance lists local rates from 2.25% to 3.30%, with Anne Arundel and Frederick counties using bracketed rates and most other jurisdictions using a flat rate.
Maryland also added a 2% surtax on capital gains for filers with AGI above $350,000, starting in tax year 2025, according to Tax Foundation. Maryland’s standard deduction is a percentage of income within a floor and ceiling, and personal exemptions phase out at higher incomes. Nonresidents who earn Maryland income file Form 505 and pay a special nonresident tax in place of a county tax; check the instructions. For a plain-English look at marginal rates, see how tax brackets work.
Maryland is unusual in taxing estates twice: it has both an estate tax and an inheritance tax, administered by the state and local registers of wills. Maryland also has a reciprocity agreement with the District of Columbia, Pennsylvania, Virginia and West Virginia, per Tax Foundation, so residents of those places who work in Maryland generally owe tax only to their home jurisdiction. If you live in Maryland and work in one of those places, your home-state treatment follows the same agreement; read the state instructions carefully.
Filing your Maryland return and free options
The Comptroller’s new Maryland Tax Connect system, launched on September 1, 2026 according to Route Fifty, allows residents to e-file Form 502 for free, make payments and check refund status. The older iFile system is view-only, so people who used it in past years should create a Tax Connect account. Maryland previously took part in the IRS Direct File pilot, which ended after the 2025 season, so Tax Connect is the state’s own free option.
Maryland’s deadline typically matches the federal deadline. If you owe and cannot pay, contact the Comptroller early. Our free filing hub covers free federal options, and state refund status explains how to track your refund. Note that Maryland’s portal changes mean instructions may differ from past years, so check the Comptroller’s individual tax pages before you file.
For the federal side, see our guides to free federal filing options and the complete guide to filing taxes.
Things Maryland residents often ask about
- Local tax on everyone: every resident pays a county or Baltimore City income tax, calculated on Form 502.
- Capital gains surtax: a 2% surtax applies to capital gains for AGI above $350,000.
- Reciprocity: DC, Pennsylvania, Virginia and West Virginia residents who work in Maryland generally owe tax only at home.
- Estate and inheritance tax: Maryland has both; they are separate from the income tax return.
- New filing system: Maryland Tax Connect replaces iFile for filing and payments.
Official Maryland links
- Comptroller of Maryland
- Maryland: individual tax forms and instructions
- Maryland: income tax rates and brackets
- Federation of Tax Administrators: State tax agencies
Frequently asked questions
What is Maryland’s local income tax?
A county or Baltimore City income tax paid by every Maryland resident, calculated on Form 502. For 2026 the Comptroller lists rates from 2.25% to 3.30%.
Can I file my Maryland return for free?
Yes. The Comptroller’s Maryland Tax Connect system lets residents file for free, make payments and check refund status.
Does Maryland have a reciprocity agreement?
Yes. Maryland has agreements with the District of Columbia, Pennsylvania, Virginia and West Virginia, per Tax Foundation’s reciprocity table.
General information only — not tax, legal or financial advice. Tax figures change every year; verify the current numbers at IRS.gov or with a qualified professional. Read the full disclaimer.