Maryland Income Tax 2026: Rates, Brackets and County Tax
Maryland runs one of the most unusual state tax systems in America: a progressive state income tax from 2% to 6.5%, plus a separate county income tax — the “piggyback tax” — that follows you based on where you live. This guide answers the questions Maryland taxpayers actually ask. Run your own numbers with the free Maryland income tax calculator.
How does Maryland’s county piggyback tax work?
Every Maryland county — and Baltimore City — levies its own income tax on top of the state tax, charged on the same taxable income and collected on Form 502. Rates for 2026 run from 2.25% in Worcester County to 3.30% in Dorchester and Kent counties. Your rate is set by where you live, not where you work.
Your employer withholds both layers using the county listed on your Form MW507, so a move across a county line changes your paycheck even if your salary stays identical. Most big counties — Montgomery, Howard, Baltimore City and Baltimore County, Prince George’s — charge 3.20%. Anne Arundel and Frederick use graduated local rates instead of one flat rate. Nonresidents who work in Maryland skip the county tax and pay a special 2.25% nonresident rate instead. For full take-home pay after federal tax and FICA too, use the paycheck calculator.
What are Maryland’s state income tax brackets for 2026?
Maryland has ten state brackets, starting at 2% on the first $1,000 of taxable income and topping out at 6.5% on income over $1,000,000 for single filers, or $1,200,000 for joint filers. The workhorse bracket is 4.75%, which covers taxable income from $3,001 up to $100,000 single or $150,000 joint — most Maryland workers land there.
The two top brackets — 6.25% and 6.5% — are new. The Budget Reconciliation and Financing Act of 2025 added them for high earners; before that, Maryland’s top rate was 5.75%. Brackets are marginal: only the income inside each band is taxed at that band’s rate. Add your county rate on top and the combined marginal rate for a typical Montgomery County worker is 7.95%.
How does Maryland’s standard deduction work in 2026?
Since tax year 2025, Maryland’s standard deduction is a flat amount: $3,350 for single filers and $6,700 for married filing jointly, head of household, and qualifying surviving spouse filers. The 2025 Act repealed the old formula — 15% of income with minimum and maximum caps — and future amounts are indexed to cost-of-living adjustments.
If your Maryland itemized deductions are larger, you can itemize instead — but since 2025, itemized deductions are reduced by 7.5% of federal adjusted gross income above $200,000 ($100,000 if married filing separately). Separately, every taxpayer claims a $3,200 personal exemption for themselves, a spouse on a joint return, and each dependent. That exemption phases down once federal AGI passes $100,000, or $150,000 for joint and head-of-household filers.
Who has to file a Maryland tax return?
If you are a Maryland resident for any part of the year and you are required to file a federal return, you generally must file a Maryland return too — Form 502 for full-year residents. Filing thresholds vary by filing status and age, but most wage earners who file federally also have a Maryland filing obligation.
Part-year residents file for the portion of the year they lived in Maryland. Nonresidents with Maryland-source income file Form 505 and pay the state tax plus the 2.25% special nonresident tax instead of a county rate. One relief valve: Maryland has reciprocity with Virginia, DC, West Virginia, and Pennsylvania for wages, so wage earners from those jurisdictions are generally exempt from Maryland tax on those wages. Returns are due in mid-April, with an automatic six-month extension to file — though not to pay.
How does Maryland compare with Virginia and DC for DMV-area movers?
Maryland is the expensive outlier of the DMV for most middle-income earners, mainly because of the county tax. Virginia’s top rate is 5.75%, but its standard deduction is far more generous — $8,500 single and $17,000 joint — and Virginia has no county income tax. DC’s top rate reaches 10.75%, yet it has no local layer under it.
The numbers make it concrete. A single filer earning $80,000 in Montgomery County owes about $5,787 in Maryland state and county tax for 2026. The same earner in Virginia owes roughly $3,800 — a gap of about $2,000 a year for crossing the Potomac. Model your own salary in the Maryland calculator before a move, and compare other states on the state income tax calculator hub. Weigh the whole picture, though: Virginia’s car tax and Maryland’s housing costs can matter as much as the income tax line.
What credits can lower your Maryland tax?
Maryland’s earned income credit is one of the most generous state versions in the country — worth up to 50% of your federal EITC, with a refundable option that can put cash back even when you owe nothing. Lower-income families can also claim a Maryland Child Tax Credit of up to $500 for each child under age six.
Retirees get relief too: Maryland does not tax Social Security, and the pension exclusion shelters a slice of other retirement income for filers 65 and older (or disabled). Credits are applied on your actual return, so eligible filers often owe noticeably less than a bracket-only estimate suggests.
Frequently Asked Questions
What is the highest county income tax rate in Maryland?
Dorchester and Kent counties tie at 3.30% for 2026 — the maximum Maryland law now allows. The state raised the county cap from 3.20% to 3.30% in the 2025 legislative session. Most large counties sit just below at 3.20%.
Does Maryland tax you based on where you live or where you work?
Where you live. Your county rate follows your residence on December 31 of the tax year, even if you work in a different county — or in DC or Virginia. People who work in Maryland but live elsewhere pay state tax plus a 2.25% special nonresident tax instead of a county rate, subject to reciprocity rules for wages.
When is the Maryland tax filing deadline?
Maryland returns are due in mid-April, following the federal deadline (April 15). Maryland grants an automatic six-month extension to file if you have a federal extension or file Form 502E, but the extension does not delay payment — interest accrues on balances paid after April.
Is the Maryland county tax deductible on my federal return?
It can be. County piggyback tax counts as a state and local income tax, so if you itemize federally it falls inside the federal SALT deduction, subject to the federal cap. Most filers take the federal standard deduction instead, in which case the county tax gives no federal benefit — one more reason the county layer stings.
Figures in this guide follow the Comptroller of Maryland’s published 2026 state brackets and county rates and the Budget Reconciliation and Financing Act of 2025. This guide is general information, not tax advice — confirm your own situation with the Comptroller or a tax professional.
