Sales Tax
- Statewide: 6.0%
- Counties cannot levy an additional sales tax.
- Common Exceptions at State Level:
- Prescription Medicine: Exempt
- Unprepared Foods: Exempt
- Certain baby products (like diapers) and medical supplies (like oral hygiene products): Exempt
- Gasoline Tax: 54.50 cents/gallon (Includes all state, local and federal taxes)
- Diesel Fuel Tax: 61.25 cents/gallon (Includes all state, local and federal taxes)
Personal Income Tax
- Personal Income Tax Rate Range: Eight brackets from 2% to 5.75% (on income over $250,000)
- Standard deduction: Single filing status: $2,400. Married Filing Jointly: $4,850.
- Personal Exemption Allowance: $3,200 but declines based on income; phased out at $100,000 ($150,000 for joint filers).
- Dependent Exemption: $3,200
- Itemized Deductions Allowed?: Yes, subject to limitations
- Retirement Income
- Social Security: Exempt
- IRAs: Taxable at ordinary income tax rates*
- 401Ks/Defined contribution employer retirement plans: Taxable at ordinary income tax rates*
- Private pensions: Taxable at ordinary income tax rates*
- Public Pensions: Taxable at ordinary income tax rates*
- Military Pay
- Active Duty Pay: Up to $15,000 may be exempt if total military pay is less than $30,000
- Military Retirement Pay: May be eligible for $5,000 exclusion if under 55, $15,000 exclusion if over 55. Law signed in May 2023 will raise these levels to $12,500 and $20,000, respectively, as of July 1, 2023.
- Military Disability Pay: Exempt
- VA Disability Dependency & Indemnity Compensation Benefits: Exempt
- SBP/SSBP/RCSBP/RSFPP: May be eligible for $5,000 exclusion if under 55, $15,000 if over 55
Income Tax Comments: *Retirement income may be eligible for pension exclusion of $34,300. Taxpayers 100 years old or older can exclude up to $100,000. Additional exemptions for first responders and rangers may be available. State allows county- and city-level income tax.
Property Tax
- Local municipalities average 1.07% of the property's assessed value.
- Calculation of assessed value: 100% of fair market value; increase phased in over three years; reassessed every three years
- Relief programs for:
- 65 and over: An increase in taxes from prior year may be deferred.
- Homestead Tax Credit: May be eligible for credit if property taxes exceed a fixed percentage of income.
- Circuit Break Property Tax Deferral: Credit based on income which cannot exceed $60,000 and only on first $300,000 of assessed value.
- Disabled Veterans/Surviving Spouses: Full exemption if 100% service-connected disability
- Renter's Tax Credit: Up to $1,000 for qualifying residents.
- Personal Property Tax: Yes, rates and exemptions are at the discretion of individual municipalities.
Inheritance & Estate Taxes: Property passing to a child or other lineal descendant, spouse of a child or other lineal descendant, spouse, parent, grandparent, stepchild or stepparent, siblings, or a corporation having only certain of these persons as stockholders is exempt from taxation, but a 10% inheritance tax on certain other individuals. A maximum 16% estate tax is imposed on estates over $5 million.
Department of Revenue website: www.marylandtaxes.gov
