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Maryland taxes at a glance (2026)

Maryland has a graduated income tax with a standard deduction of $3,350 (single) / $6,700 (married). Graduated state tax 2%-6.5%. Budget Reconciliation and Financing Act of 2025 (Ch.604) added two new high-earner brackets effective TY2025+: 6.25% (single $500,001-$1M; MFJ $600,001-$1.2M) and 6.5% (single over $1M; MFJ over $1.2M). LOCAL COUNTY/CITY income tax is mandatory on top of state: each of 23 counties + Baltimore City sets its own rate; the Act RAISED the local maximum to 3.30% for tax years beginning after Dec 31, 2025 (TY2026), up from the prior 3.20% cap. Range runs from 2.25% (Worcester, lowest) to 3.30% max; combined top marginal rate is ~9.8% (6.5% state + 3.30% local). Standard deduction for 2026 is a FIXED dollar amount ($3,350 single/MFS/dependent; $6,700 MFJ/HOH/QSS), indexed to COLA going forward. The Act ELIMINATED the prior income-based phase-in (it is NO LONGER 15% of MD AGI with a floor/cap). New 2% surtax on net capital gains for filers with federal AGI over $350,000 (effective TY2025+, with exceptions). Itemized deductions phased out: reduced by 7.5% of federal AGI above $200,000 ($100,000 if MFS), effective TY2025+. Social Security benefits are fully exempt from MD state tax. Pension/retirement income exclusion (up to ~$39,500 for 2026, age 65+/disabled) plus a separate military retirement subtraction. Personal exemptions ($3,200 base, phased out at higher AGI) are taken separately, not part of the standard deduction.