Disclaimer: Calculations are estimates based on tax rates as of Jan. 2023 and data from the Tax Foundation. These rates are subject to change. Check the IRS website for the latest information about income taxes and your state tax website for state-specific information. Our calculator doesn’t consider both 401k and IRA deductions due to the tax law limitations. Please note, the amount of your IRA deductions may vary. You should speak with a tax professional to determine your tax situation.
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What You Need To Know About Maryland State Taxes
The state of Maryland requires you to pay taxes if you are a resident or nonresident that receives income from a Maryland source. The state income tax rates range from 2% to 5.75%, and the sales tax rate is 6%.
Maryland offers tax deductions and credits to reduce your tax liability, including a standard deduction, itemized deduction, the earned income tax credit, child and dependent care credit and college savings tax deduction.
Maryland Income Tax Brackets and Rates: Single or Filing Separately
| If your Maryland taxable income is over: | But not over: | Your tax is: |
|---|---|---|
| $0 | $1,000 | 2% of your income |
| $1,00 | $2,000 | $20 plus 3% of the excess over $1,000 |
| $2,000 | $3,000 | $50 plus 4% of the excess over $2,000 |
| $3,000 | $100,000 | $90 plus 4.75% of the excess over $3,000 |
| $100,000 | $125,000 | $4,697.50 plus 5% of the excess over $100,000 |
| $125,000 | $150,000 | $5,947.50 plus 5.25% of the excess over $125,000 |
| $150,000 | $250,000 | $7,260.00 plus 5.5% of the excess over $150,000 |
| $250,000 | $12,760.00 plus 5.75% of the excess of $250,000 |
Maryland Income Tax Brackets and Rates: Joint Returns, Head of Household, and Qualifying Widows/Widowers
| If your Maryland taxable income is over: | But not over: | Your tax is: |
|---|---|---|
| $0 | $1,000 | 2% of your income |
| $1,00 | $2,000 | $20 plus 3% of the excess over $1,000 |
| $2,000 | $3,000 | $50 plus 4% of the excess over $2,000 |
| $3,000 | $150,000 | $90 plus 4.75% of the excess over $3,000 |
| $150,000 | $175,000 | $7,072.50 plus 5% of the excess over $150,000 |
| $175,000 | $225,000 | $8,332.50 plus 5.25% of the excess over $175,000 |
| $225,000 | $300,000 | $10,947.50 plus 5.5% of the excess over $225,000 |
| $300,000 | And over | $15,072.50 plus 5.75% of the excess over $300,000 |
Income Tax Deductions for Maryland
Standard Deduction
The state of Maryland offers a standard and itemized deduction for taxpayers. The 2021 standard deduction allows taxpayers to reduce their taxable income by up to $2,350 for single filers and up to $4,700 for taxpayers filing jointly, head of household or qualifying widows/widowers.
Itemized Deductions
Maryland taxpayers may choose to itemize their deductions if they also did so on their federal return. However, taxpayers who itemized their federal deductions are not required to use itemized deductions on their Maryland income tax return.
Child Care Deduction
Taxpayers with child dependents can subtract the cost of child care, up to $3,000 ($6,000 for two or more dependents receiving care).
Adoption Expenses Deduction
Taxpayers who adopt a child through a public or nonprofit agency can deduct up to $5,000 in expenses. Taxpayers who adopt a child with special needs can deduct up to $6,000 in expenses.
College Savings Deduction
Taxpayers who contributed to a Maryland College Investment Plan account can deduct up to $2,500 per beneficiary. If you purchased advanced tuition payments to the Maryland Prepaid College Trust, you may deduct up to $2,500 per contract.
Classroom Supplies Deduction
Full-time kindergarten through 12th-grade classroom teachers may subtract up to $250 in unreimbursed classroom supplies.
First-Time Homebuyer Savings Deduction
Taxpayers who contributed to a First-Time Homebuyer Savings Account may deduct up to $5,000 of the amount contributed per year. Interest may be included in that deduction. You can claim this deduction for up to 10 years, and for no more than $50,000 in that period.
Charitable Donation Deduction
The value of donations of some disposable diapers and personal hygiene products to charitable organizations may be deductible
Unemployment Compensation Deduction
Taxpayers who received unemployment compensation from the Maryland Department of Labor can deduct the amount as long as their federal adjusted gross income (AGI) doesn’t exceed $75,000 ($100,000 for a married couple filing jointly, head of household filer, or surviving spouse).
Maryland State Income Tax Credits
Earned Income Tax Credit
You can claim the Maryland Earned Income Tax Credit if you claimed the EITC on your federal return.
The federal EITC income cap ranges from $21,430 to $57,414 depending on how you file and how many children or relative dependents you claim. The maximum federal EITC amount you can claim on your 2021 tax return is $6,728.
If you are a married couple filing separately or jointly, or you have at least one qualifying child, you can claim 50% of the federal credit on your Maryland tax return. If you are a single filer, head of household, or surviving spouse without a qualifying child, you may claim the full amount of the federal EITC.
If your Maryland EITC is higher than your Maryland tax, you may be eligible for a refund.
The Child and Dependent Care Credit
You may be able to claim the child and dependent care credit if you paid someone to care for your child, a dependent or spouse. You must have claimed this credit on your federal tax return to claim it on your Maryland return. The credit may be refundable if your federal adjusted gross income is $52,100 or less ($78,150 or less for joint filers).
Long-Term Care Insurance Credit
Taxpayers who pay a premium toward a long-term care insurance policy for themselves or a Maryland family member may be eligible for a one-time credit on their Maryland tax return. The credit is $400 for policies for someone age 40 or less, and $500 for a policy for someone over 40.
Student Loan Debt Relief Tax Credit
Student loan borrowers who have incurred more than $20,000 in student loan debt may be eligible for a refundable tax credit. The maximum value of the credit is $5,000. Borrowers must apply for the tax credit with the Maryland Higher Education Commission by Sept. 15 of each year.
Maryland Child Tax Credit
Taxpayers with federal adjusted gross income of $6,000 or less may claim a refundable credit of $500 for each qualifying child (generally, dependents under age 17).
Renters’ Tax Credit
Maryland offers a tax credit of up to $1,000 per year for renters age 60 and up or 100% disabled. Some residents with dependent children may also be eligible for a credit. Income restrictions apply, and applications for the program must be submitted by October of each year.
Do I Have to Pay Income Tax in Maryland?
You are required to file a Maryland tax return if you are a full- or part-time resident of the state, and you are required to file a federal income tax return. If you aren’t a resident but had income from a Maryland source, you must file a nonresident tax return (form 505 or 515).
You may also have to pay local income tax set by your county.
Related: Maryland Income Tax Calculator
Sales Tax and Sales Tax Rates
Maryland charges sales taxes of 6%.
Property Taxes and Property Tax Rates
Property taxes are determined at the county and municipality level.
Property Tax Credit
Maryland provides property tax credit for some homeowners based on their income. Your net worth, not including property value or qualified retirement savings, must be less than $200,000, and your gross household income can’t be more than $60,000. After a homeowner applies for the Homeowners’ Tax Credit, the credit is calculated automatically and issued as a deduction on the July property tax bill.
Capital Gains Taxes
Maryland taxes capital gains as ordinary income.
Inheritance and Estate Tax and Inheritance and Estate Tax Exemption
Maryland has an estate tax and an inheritance tax.
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FAQs
What are the Forbes income tax brackets for 2023? ›
The 2023 tax year—the return you'll file in 2024—will have the same seven federal income tax brackets as the 2022-2023 season: 10%, 12%, 22%, 24%, 32%, 35% and 37%. Your filing status and taxable income, including wages, will determine the bracket you're in.
What are the estimated tax rates for 2023? ›For the 2023 tax year, there are seven tax rates: 10%, 12%, 22%, 24%, 32%, 35% and 37%, the same as in tax year 2022. Tax returns for 2023 are due in April 2024, or October 2024 with an extension.
What are the tax brackets for 2023 in Maryland? ›For 2023, we will use thirteen brackets: 2.25%, 2.40%, 2.65%, 2.70%, 2.75%, 2.81%, 2.96%, 3.00%, 3.03%, 3.05%, 3.06%, 3.10%, and 3.20%. Refer to the county listing below and use the table that agrees with, or is closest to, without going below the actual local tax rate.
What is the Maryland state tax rate for 2022? ›| Taxpayers Filing as Single, Married Filing Separately, Dependent Taxpayers or Fiduciaries | Taxpayers Filing Joint Returns, Head of Household, or Qualifying Widows/Widowers | |
|---|---|---|
| $0 - $1,000 | 2.00% | 2.00% |
| $1,000 - $2,000 | $20 plus 3.00% of the excess over $1,000 | $20 plus 3.00% of the excess over $1,000 |
With federal tax brackets and rates, the tax rates themselves aren't changing. The same seven tax rates in effect for the 2022 tax year – 10%, 12%, 22%, 24%, 32%, 35%, and 37% – still apply for 2023.
Will I get a bigger tax refund in 2023? ›According to early IRS data, the average tax refund will be about 11% smaller in 2023 versus 2022, largely due to the end of pandemic-related tax credits and deductions.
Did Maryland taxes go up in 2023? ›Maryland Tax Changes Effective January 1, 2023. Maryland temporarily increased the refundable version of its EITC from 28 percent in 2019 to 45 percent for tax years 2020 through 2022 with the enactment of S.B. 496 in February 2021. The credit is set to revert to 28 percent for tax years 2023 and beyond.
What is the personal exemption for 2023 in Maryland? ›There have been no changes affecting personal exemptions on the Maryland returns. Personal Exemption Amount - The exemption amount of $3,200 begins to be phased out if your federal adjusted gross income is more than $100,000 ($150,000 for joint taxpayers).
What is Maryland state income tax rate? ›For tax year 2021, Maryland's personal tax rates begin at 2% on the first $1000 of taxable income and increase up to a maximum of 5.75% on incomes exceeding $250,000 (or $300,000 for taxpayers filing jointly, heads of household, or qualifying widow(ers).
Is Maryland a high tax state? ›There are also jurisdictions that collect local income taxes. Maryland has a 8.25 percent corporate income tax rate. Maryland has a 6.00 percent state sales tax rate and does not levy any local sales taxes. Maryland's tax system ranks 46th overall on our 2023 State Business Tax Climate Index.
At what age do you stop paying property taxes in Maryland? ›
Be at least 65 years of age.
Did Maryland taxes go up in 2022? ›New Tax Rates
Local Tax Rate Changes - There are no local tax rates increase for tax year 2022, however, six counties (Allegany's, Anne Arundel's*, Cecil's, Frederick's*, St Mary's and Washington's) have decreased their local rate for calendar year 2023.
If you are at least 65 years old or blind, you can claim an additional 2023 standard deduction of $1,850 (also $1,850 if using the single or head of household filing status). If you're both 65 and blind, the additional deduction amount is doubled.
How will my paycheck change in 2023? ›Your 2023 Paychecks May Increase
The IRS adjustments will raise the top amounts of all seven federal income tax brackets for 2023, and thereby increase the paychecks of many employees by taxing more of their earnings at lower rates.
The formula for sales tax is a simple algebra equation that involves converting a percentage to a decimal, then using the decimal as a multiplier on the cost of the item to get the final sales tax amount. When written out, the equation looks like this: Sales tax rate = Sales tax percent / 100.
How much can a 70 year old earn without paying taxes? ›Basically, if you're 65 or older, you have to file a tax return in 2022 if your gross income is $14,700 or higher. If you're married filing jointly and both 65 or older, that amount is $28,700. If you're married filing jointly and only one of you is 65 or older, that amount is $27,300.
What percent is Social Security and Medicare? ›NOTE: The 7.65% tax rate is the combined rate for Social Security and Medicare. The Social Security portion (OASDI) is 6.20% on earnings up to the applicable taxable maximum amount (see below). The Medicare portion (HI) is 1.45% on all earnings.
How can I maximize my tax return? ›- Try itemizing your deductions.
- Double check your filing status.
- Make a retirement contribution.
- Claim tax credits.
- Contribute to your health savings account.
- Work with a tax professional.
Changes for 2023
When you file your taxes this year, you may have a lower refund amount, since some tax credits that were expanded and increased in 2021 will return to 2019 levels. The 2023 changes include amounts for the Child Tax Credit (CTC), Earned Income Tax Credit (EITC), and Child and Dependent Care Credit.
What is the average tax refund for a single person making $30,000? Based on our estimates using the 2017 tax brackets, a single person making $30,000 per year will get a refund of $1,556. This is based on the standard deduction of $6,350 and a standard $30,000 salary.
Will less taxes be taken out in 2023? ›
2023 Tax Bracket Changes
Broadly speaking, the 2023 tax brackets have increased by about 7% for all filing statuses. This is significantly higher than the roughly 3% and 1% increases enacted for 2022 and 2021, respectively.
- Be 18 or older or have a qualifying child.
- Have earned income of at least $1.00 and not more than $30,000.
- Have a valid Social Security Number or Individual Taxpayer Identification Number (ITIN) for yourself, your spouse, and any qualifying children.
- Living in California for more than half of the tax year.
Is Social Security taxable in Maryland? Maryland exempts all Social Security retirement benefits from taxation. Taxpayers who pay federal taxes on Social Security can subtract the taxed benefits out of their taxable income on their Maryland tax return.
What is the lifetime exemption in Maryland? ›Maryland Estate Tax Exemption
The estate tax threshold for Maryland is $5 million as of 2023. This means that if you die and your total estate is worth less than $5 million, the estate owes nothing at all to the state of Maryland.
Only churches, religious organizations and government agencies may use an exemption certificate to purchase items for resale without paying sales and use tax. All other organizations must issue a resale certificate, with their Maryland sales and use tax license number, to purchase items tax-free for resale.
How many exemptions should I claim in Maryland? ›For those filing separately, you can only claim one exemption for yourself and may not claim an exemption for your spouse. Those filing jointly may claim one exemption for each person.
Which county in Maryland has the highest taxes? ›Overall, Frederick County has the one of the highest property tax rates of any county in Maryland. The county's average effective tax rate is 1.18%. In some cities, the total rate will be much higher than that. For example, in the city of Frederick, the total listed rate is $1.060 per $100 of assessed value.
What is the standard deduction for Maryland? ›Summary. The standard deduction amounts for the State of Maryland have changed as follows: The minimum Standard Deduction has changed from $1,600 to $1,700. The maximum Standard Deduction has changed from $2,400 to $2,550.
How much Maryland state tax should be withheld? ›Employees in Maryland can expect to pay between 2% and 5.75% state income tax for 2022, depending upon their total income and filing status.
What is the most tax friendly state? ›MoneyGeek's analysis found that Wyoming is the most tax-friendly state in America, followed by Nevada, Tennessee, Florida and Alaska. States that received a grade of A all share something in common: no state income tax. Washington and South Dakota — which both received a B — also have no state income tax.
Who has better taxes Maryland or Virginia? ›
In 2019, 60% of D.C.'s general revenue came from taxes. That percentage was just over the national average for taxes as a percentage of state and local general revenue (53.63%). State and local taxes were almost the same percentage of general revenue in Maryland (60.62%) and slightly lower in Virginia (54.88%).
Who has higher taxes Virginia or Maryland? ›There is no way to compare and say that Maryland or Virginia is better because they are so similar. The difference lies in the income tax which is much higher in Maryland than Virginia, and the possibly offsetting personal property tax in Virginia.
What is the new Maryland tax law for seniors? ›Retirement Tax Elimination Act of 2023
This bill creates a subtraction modification against the State income tax for 100% of the income received by an individual who (1) is receiving old age or survivor Social Security benefits or (2) is at least age 65 and is not employed full time.
Starting in tax year 2022, residents who are at least 65 on the last day of the tax year may be eligible for a nonrefundable tax credit of up to $1,000. This was a piece of legislation that AARP Maryland sponsored and helped pass in the 2022 legislative session.
At what age is Social Security no longer taxed? ›Social Security benefits may or may not be taxed after 62, depending in large part on other income earned. Those only receiving Social Security benefits do not have to pay federal income taxes.
What is the standard deduction for seniors over 65 in 2023? ›If you are at least 65 years old or blind, you can claim an additional 2023 standard deduction of $1,850 (also $1,850 if using the single or head of household filing status). If you're both 65 and blind, the additional deduction amount is doubled.
What is the IRS tax rate inflation rate for 2023? ›Inflation last year reached its highest level in the United States since 1981. As a result, the IRS announced the largest inflation adjustment for individual taxes in decades: 7.1 percent for tax year 2023.
Does the standard deduction increase at age 65? ›When you're over 65, the standard deduction increases. The specific amount depends on your filing status and changes each year. The standard deduction for seniors this year is actually the 2022 amount, filed by April 2023.
What are the tax changes for seniors in 2023? ›If you're 65 or older, your additional standard deduction increases from $1,400 to $1,500 if you're married and from $1,750 to $1,850 if you're single or the head of household. Marginal tax rates are the same in 2023 as in 2022. The lowest rate is still 10 percent and the highest is still 37 percent.
What is the Social Security and Medicare tax limit for 2023? ›Social security and Medicare tax for 2023.
The social security wage base limit is $160,200. The Medicare tax rate is 1.45% each for the employee and employer, unchanged from 2022. There is no wage base limit for Medicare tax.
How can I reduce my taxable income? ›
How Can I Reduce My Taxable Income? There are a few methods that you can use to reduce your taxable income. These include contributing to an employee contribution plan, such as a 401(k), contributing to a health savings account (HSA) or a flexible spending account (FSA), and contributing to a traditional IRA.
What state has the highest taxes? ›- New York - 12.47%
- Hawaii - 12.31%
- Maine - 11.14%
- Vermont - 10.28%
- Connecticut - 9.83%
- New Jersey - 9.76%
- Maryland - 9.44%
- Minnesota - 9.41%
- Alaska.
- Florida.
- Nevada.
- South Dakota.
- Texas.
- Washington.
- Wyoming.
- California: 7.25% sales tax rate.
- Indiana: 7% sales tax rate.
- Mississippi: 7% sales tax rate.
- Rhode Island 7% sales tax rate.
- Tennessee: 7% sales tax rate.
- Minnesota: 6.875% sales tax rate.
- Nevada: 6.85% sales tax rate.
- New Jersey: 6.625% sales tax rate.
For retirees 65 and older, here's when you can stop filing taxes: Single retirees who earn less than $14,250. Married retirees filing jointly, who earn less than $26,450 if one spouse is 65 or older or who earn less than $27,800 if both spouses are age 65 or older.
Do you have to pay income tax after age 75? ›There is no age at which you no longer have to submit a tax return and most senior citizens do need to file taxes every year. However if Social Security is your only form of income then it is not taxable. In the case of a married couple who file jointly, this must be true of both spouses.
What are red flags for the IRS? ›Some red flags for an audit are round numbers, missing income, excessive deductions or credits, unreported income and refundable tax credits. The best defense is proper documentation and receipts, tax experts say.