Maryland State Tax Rate Guide – Maryland’s tax system combines a progressive state income tax with county-level local taxes, a flat statewide sales tax, and county-specific property taxes. Whether you’re a resident, business owner, or planning a move to the Old Line State, this comprehensive Maryland state tax rate guide breaks down the latest rates for tax year 2025 (returns filed in 2026). All information comes from official Maryland Comptroller sources and the Tax Foundation.
Understanding these rates helps you plan, file accurately, and potentially lower your tax bill through credits and deductions. Always verify with the latest forms on marylandtaxes.gov, as rates can change with legislation.
Maryland State Income Tax Rates and Brackets for 2025
Maryland uses a graduated (progressive) income tax system. The 2025 Budget Reconciliation and Financing Act added two new top brackets for high earners: 6.25% and 6.50%. These apply only to income above the thresholds.
Tax Rate Schedule I (Single, Married Filing Separately, Dependent Taxpayers, or Fiduciaries)
| Taxable Net Income | Maryland Tax Calculation |
|---|---|
| $1 – $1,000 | 2.00% of taxable net income |
| $1,001 – $2,000 | $20 + 3.00% of excess over $1,000 |
| $2,001 – $3,000 | $50 + 4.00% of excess over $2,000 |
| $3,001 – $100,000 | $90 + 4.75% of excess over $3,000 |
| $100,001 – $125,000 | $4,697.50 + 5.00% of excess over $100,000 |
| $125,001 – $150,000 | $5,947.50 + 5.25% of excess over $125,000 |
| $150,001 – $250,000 | $7,260 + 5.50% of excess over $150,000 |
| $250,001 – $500,000 | $12,760 + 5.75% of excess over $250,000 |
| $500,001 – $1,000,000 | $27,135 + 6.25% of excess over $500,000 |
| $1,000,001 and over | $58,385 + 6.50% of excess over $1,000,000 |
Tax Rate Schedule II (Married Filing Jointly, Head of Household, or Qualifying Surviving Spouse)
| Taxable Net Income | Maryland Tax Calculation |
|---|---|
| $1 – $1,000 | 2.00% of taxable net income |
| $1,001 – $2,000 | $20 + 3.00% of excess over $1,000 |
| $2,001 – $3,000 | $50 + 4.00% of excess over $2,000 |
| $3,001 – $150,000 | $90 + 4.75% of excess over $3,000 |
| $150,001 – $175,000 | $7,072.50 + 5.00% of excess over $150,000 |
| $175,001 – $225,000 | $8,322.50 + 5.25% of excess over $175,000 |
| $225,001 – $300,000 | $10,947.50 + 5.50% of excess over $225,000 |
| $300,001 – $600,000 | $15,072.50 + 5.75% of excess over $300,000 |
| $600,001 – $1,200,000 | $32,322.50 + 6.25% of excess over $600,000 |
| $1,200,001 and over | $69,822.50 + 6.50% of excess over $1,200,000 |
Note: These rates apply to Maryland taxable net income after federal adjustments, subtractions, and deductions. Withholding uses a minimum 4.75% state rate plus local tax.
Maryland Local Income Tax Rates by County (2025)
Every Maryland resident also pays a local income tax to their county (or Baltimore City). Rates are flat for most jurisdictions but progressive in Anne Arundel and Frederick Counties. The maximum local rate cap rose to 3.30% in 2025.
Here are the 2025 local rates (as a percentage of Maryland taxable income):
- Allegany: 3.03%
- Anne Arundel: Progressive (2.70% up to $50k single/$75k joint; 2.94% next tier; 3.20% highest)
- Baltimore County: 3.20%
- Baltimore City: 3.20%
- Calvert: 3.20%
- Caroline: 3.20%
- Carroll: 3.03%
- Cecil: 2.74%
- Charles: 3.03%
- Dorchester: 3.30%
- Frederick: Progressive (2.25%–3.20% tiers by filing status and income)
- Garrett: 2.65%
- Harford: 3.06%
- Howard: 3.20%
- Kent: 3.20%
- Montgomery: 3.20%
- Prince George’s: 3.20%
- Queen Anne’s: 3.20%
- St. Mary’s: 3.20%
- Somerset: 3.20%
- Talbot: 2.40%
- Washington: 2.95%
- Wicomico: 3.20%
- Worcester: 2.25%
Pro Tip: Employers use your county of residence for withholding. Check your paystub or Form MW507 for accuracy.
Maryland Sales Tax Rate Guide
Maryland maintains one of the simplest sales tax structures in the U.S.: a flat 6% statewide rate with no local sales taxes.
Special rates include:
- Alcoholic beverages: 9%
- Adult-use cannabis and products: 12% (increased July 2025)
- Vehicle rentals: 11.5% (cars/RVs), 8% (trucks)
- Electronic smoking devices/vaping liquid: Higher excise rates apply
- Certain IT, data, and software publishing services: New 3% sales tax effective July 1, 2025 (with some exemptions for cybersecurity and qualified businesses)
Most groceries, prescription drugs, and certain services remain exempt.
Maryland Property Tax Rates by County
Property taxes are set at the county level and apply to real and personal property. Rates are expressed per $100 of assessed value. Maryland’s statewide effective property tax rate on owner-occupied housing is approximately 0.90%.
2025 county real property tax rates (examples; full details in official county schedules):
- Allegany: $0.9750
- Anne Arundel: $0.9830
- Baltimore City: $2.2480
- Baltimore County: $1.1000
- Howard: $1.2500
- Montgomery: $1.0392 (plus special district taxes)
- Prince George’s: $1.3740
- Worcester: $0.8450
Homestead Credit caps annual assessment increases (typically 5–10% depending on county), protecting homeowners from sharp tax hikes. Check your county’s specific rates and credits annually.
Maryland Corporate Income Tax Rate
C corporations pay a flat 8.25% corporate income tax on Maryland taxable income (apportioned for multi-state businesses).
Pass-through entities (S corps, LLCs, partnerships) may owe a special nonresident withholding tax of 8.75% (6.50% state + 2.25% nonresident) on income allocable to nonresident owners.
Other Key Maryland Taxes
- Estate Tax: Maryland imposes an estate tax with a $5 million exemption (adjusted periodically). No inheritance tax on most transfers to close family.
- Gas Tax: Included in fuel prices (rate subject to annual adjustment).
- Excise Taxes: Apply to tobacco, alcohol, and motor vehicles.
Tax Deductions, Credits, and Filing Tips for Maryland Residents
Maryland conforms to many federal deductions but has its own rules:
- Standard Deduction (2025): Flat amount used in withholding calculations ($3,350); actual filing follows federal rules with Maryland additions/subtractions.
- Personal Exemptions: Phased out at higher incomes; claim on Form MW507 for withholding.
- Popular Credits: Earned Income Tax Credit (state and local versions), Child Tax Credit add-ons, Research & Development, and job creation credits for businesses.
Filing Deadline: April 15, 2026 (for tax year 2025). Maryland offers free Direct File and e-filing options. Use Maryland Tax Connect for businesses.
Recent Maryland Tax Changes for 2025–2026
- New top income tax brackets (6.25% and 6.50%)
- Local income tax cap increased to 3.30%
- 3% sales tax on select digital/IT services
- Cannabis sales tax raised to 12%
- Updated standard deduction and withholding formulas
How to Stay Compliant and Minimize Your Maryland Taxes?
- Update your Form MW507 exemption certificate with your employer.
- Track county-specific rules (especially progressive local taxes).
- Maximize available credits through the Maryland Comptroller’s website.
- Consult a tax professional or use tax software that supports Maryland filings.
For the most accurate and personalized advice, visit the official Maryland Comptroller’s Office at marylandtaxes.gov or contact 1-800-MD-TAXES. Tax laws change—always use the latest 2025 forms and instructions.
This Maryland state tax rate guide is for informational purposes only and not a substitute for professional tax advice. Rates reflect the latest available data as of 2026.