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Maryland Paycheck Overview

Maryland has one of the most complex state income tax environments in the country due to the combination of progressive state rates and mandatory county-level income taxes. The state income tax ranges from 2% to 5.75% across eight brackets, with the top rate applying to income above $250,000 for single filers. On top of this, every one of Maryland's 23 counties and the city of Baltimore imposes a local income tax ranging from 1.75% to 3.2%. This dual-layer system means that a Maryland worker's combined state and local income tax rate ranges from approximately 5.75% to 8.95% at the top, making Maryland one of the higher-tax states for middle and upper-income workers.

For a typical Maryland worker earning approximately $2,500 bi-weekly ($65,000 annually), the state tax is roughly $2,620 and the county tax adds approximately $1,560 to $2,080 depending on the county, for a combined total of $4,180 to $4,700. Maryland allows a standard deduction of 15% of Maryland adjusted gross income, with a minimum of $1,800 and a maximum of $2,550 for single filers ($3,600 minimum and $5,150 maximum for joint filers). This is notably less generous than the federal standard deduction, exposing more income to state and local taxation.

Maryland State Income Tax Brackets for 2026

Maryland's eight-bracket progressive system for single filers is:

• 2.0% on the first $1,000 of taxable income
• 3.0% on $1,000 to $2,000
• 4.0% on $2,000 to $3,000
• 4.75% on $3,000 to $100,000
• 5.0% on $100,000 to $125,000
• 5.25% on $125,000 to $150,000
• 5.5% on $150,000 to $250,000
• 5.75% on income above $250,000

Married filing jointly filers have wider thresholds at the upper brackets. The 4.75% bracket covers the largest range ($3,000 to $100,000 for single filers), meaning most Maryland workers pay an effective state rate between 4.3% and 4.75% before the county tax is added.

Here is a worked example for a single Montgomery County filer earning $65,000:

• Gross income: $65,000
• Maryland standard deduction (15% of income, capped): $2,550
• State taxable income: $62,450
• Tax on first $3,000 (lower brackets): $90
• Tax on $3,000-$62,450 at 4.75%: $2,824
• Total state tax: approximately $2,914
• Montgomery County tax (3.2%): $65,000 x 0.032 = $2,080
• Combined state + county: $4,994
• Effective combined rate: 7.68%

The standard deduction's 15%-of-income structure is unusual and caps at $2,550 for single filers, providing significantly less relief than most states offer. This low cap means Maryland exposes more of your income to taxation than states using the federal standard deduction of $15,000.

Maryland County Income Taxes

Maryland is one of very few states where every local jurisdiction imposes a mandatory income tax. This is not optional and cannot be avoided by any Maryland resident. County rates for 2026 include:

• Montgomery County: 3.2% (the highest rate, home to Bethesda, Silver Spring, Rockville)
• Prince George's County: 3.2%
• Howard County: 3.2%
• Baltimore County: 3.2%
• Baltimore City: 3.2%
• Anne Arundel County (Annapolis): 2.81%
• Frederick County: 2.96%
• Harford County: 3.06%
• Worcester County: 1.75% (the lowest rate)
• Garrett County: 2.65%

Many of the most populated counties, including all the D.C. suburbs, charge the maximum 3.2% rate. A Montgomery County worker earning $65,000 pays approximately $2,080 in county income tax on top of the roughly $2,620 in state tax, for a combined $4,700 in state and local income tax. This is a substantial burden that makes Maryland one of the more expensive states for paycheck deductions. Our calculator estimates the state tax portion only; be sure to add your county rate for a complete picture.

Maryland Credits and Deductions

Maryland offers several important state tax credits that can help offset the combined state and county tax burden:

• Maryland Earned Income Tax Credit: Maryland provides both a refundable state EITC (equal to 45% of the federal EITC) and a nonrefundable EITC (equal to 100% of the state poverty-level EITC). A single parent with two children earning $40,000 who qualifies for a $3,500 federal EITC receives up to $1,575 in refundable Maryland EITC, one of the most generous state EITCs in the nation.
• Child and Dependent Care Credit: Maryland offers a credit for child and dependent care expenses based on a percentage of the federal credit, providing additional relief for working parents in the expensive D.C. metro area.
• Student Loan Debt Relief Credit: Maryland offers a tax credit of up to $5,000 for eligible residents who have incurred student loan debt. This competitive program accepts applications annually.
• Homeowner's Property Tax Credit: Maryland provides an automatic credit limiting the amount of property taxes homeowners pay based on income, which is especially valuable given the high property values in D.C. suburbs.
• 529 Plan Deduction: Maryland allows a state tax deduction of up to $2,500 per beneficiary per year for contributions to a Maryland 529 plan. For a family contributing $2,500 and living in a 3.2% county, this saves approximately $200 in combined state and county tax.
• Renters' Tax Credit: Maryland offers a refundable tax credit for eligible renters age 60+ (or disabled) with income below certain thresholds, providing up to $1,000 in relief.

Cost of Living Considerations

Maryland's cost of living is above the national average, driven primarily by housing costs in the D.C. metro area and the Baltimore corridor. Montgomery County and Howard County have median home prices exceeding $550,000, with some areas approaching $700,000. Baltimore City and the Eastern Shore offer more affordable options, but wages tend to be lower in those areas as well. The combination of high housing costs, high income taxes (state plus county), and above-average property taxes creates a significant total financial burden for Maryland residents. Baltimore City has more affordable housing with median home prices around $220,000, but wages tend to be lower than in the D.C. suburbs. Frederick County median home prices are approximately $430,000, and Harford County is near $350,000. The Eastern Shore is more affordable, with many areas having medians below $300,000. However, median household incomes in Maryland are among the highest in the nation (roughly $95,000), reflecting the concentration of federal government, defense contractor, cybersecurity, and biotech employment, particularly along the I-270 corridor and at facilities like Fort Meade, the National Institutes of Health, and the Goddard Space Flight Center.

Tips for Maryland Workers

• Understand your total income tax rate: Your Maryland tax burden is the state rate plus your county rate. For most D.C. suburb residents, this means a combined rate of 7.95% to 8.95% at the top, making Maryland one of the highest-tax states in the country for effective income tax.
• Maximize retirement contributions aggressively: With combined rates approaching 8% to 9%, pre-tax 401(k) and traditional IRA contributions deliver significant savings. A $10,000 annual contribution saves $475 to $575 in state tax plus $200 to $320 in county tax, on top of federal savings.
• Compare to Virginia carefully: If you work in the D.C. area, living in Virginia saves you the entire Maryland county tax (1.75% to 3.2%) and Virginia has no local income taxes. This can mean $1,500 to $3,000 per year in savings, depending on your county and income.
• Consider the 529 plan deduction: Maryland offers a state tax deduction of up to $2,500 per beneficiary per year for 529 plan contributions. For families with children, this can reduce your state taxable income meaningfully.
• Review your county rate when moving: If you move within Maryland, your county tax rate may change significantly. Moving from Montgomery County (3.2%) to Worcester County (1.75%) saves $942 per year on a $65,000 income. Update your MW507 form with your employer after any move.
• Claim the state EITC: Maryland's refundable EITC at 45% of the federal credit is among the most generous in the nation. A qualifying family receiving $4,000 in federal EITC gets an additional $1,800 from Maryland, which can produce a significant state refund.
• Apply for the Student Loan Debt Relief Credit: If you have student loan debt, Maryland's tax credit of up to $5,000 can provide meaningful relief. Applications open annually and are awarded competitively based on financial need and debt levels.

How Maryland Compares to Other States

Maryland's combined state and local income tax burden is among the highest in the nation for workers in the D.C. suburbs. A Montgomery County resident faces up to 8.95% combined income tax, compared to Virginia's maximum 5.75% (with no local income tax) and D.C.'s 4% to 10.75% (depending on income). For a worker earning $80,000, Maryland with a 3.2% county rate produces approximately $5,680 in combined state and local income tax, while Virginia produces about $3,960 and D.C. about $3,700. Pennsylvania, on Maryland's northern border, charges only 3.07% with some local taxes possible but generally much lower. Delaware's top rate of 6.6% is lower than Maryland's combined rate in most counties. For D.C. area commuters, the Maryland-Virginia tax differential is one of the most frequently cited reasons for choosing to live on the Virginia side. A federal employee earning $85,000 saves approximately $2,000 per year by choosing Arlington, Virginia over Bethesda, Maryland (Montgomery County), a difference that compounds to $20,000 or more over a decade before accounting for investment returns on those savings.

Frequently Asked Questions

What is Maryland's state income tax rate?

Maryland has progressive rates from 2% to 5.75% across eight brackets. The 4.75% rate covers most income from $3,000 to $100,000 for single filers, meaning that most middle-income workers pay an effective state rate between 4.3% and 4.75%. Additionally, every Maryland county imposes a local income tax of 1.75% to 3.2%, making the combined rate up to 8.95% at the top. The standard deduction is capped at $2,550 for single filers, which is much less generous than most states.

What are Maryland county income taxes?

Every Maryland county and Baltimore City imposes a mandatory local income tax. Most populous counties, including Montgomery, Prince George's, Howard, and Baltimore County, charge 3.2%. The lowest rate is 1.75% in Worcester County. This is unusual nationally; very few states have mandatory county-wide income taxes.

How does Maryland compare to Virginia for D.C. commuters?

Maryland is significantly more expensive for income tax purposes. A worker earning $80,000 in Montgomery County pays roughly $5,680 in combined state and county tax, versus approximately $3,960 in Virginia (which has no local income tax) and $3,700 in D.C. The annual savings of living in Virginia versus Maryland can be $1,500 to $3,000 or more, depending on income and county. Virginia also has reciprocity agreements that simplify tax filing for cross-border commuters in the D.C. metro area.

Does this calculator include Maryland county taxes?

No. The calculator estimates Maryland state income tax (2% to 5.75%) plus federal taxes and FICA. You should add your county income tax rate (1.75% to 3.2%) to the state tax estimate for a complete picture of your Maryland paycheck deductions.