Maryland State Taxes: Everything You Need to Know
Maryland is one of the states where residents are earning the most money — it’s one of just three states with an average household income in excess of $100,000 a year. But residents are also paying a lot of that in taxes — just over $16,000 a year for an average taxpayer.
That average tax bill, though, is on a relatively low tax rate — just 21.16 percent for the average Maryland resident when factoring in all the different sources of taxation. As such, it would appear that Maryland’s high income levels are helping the state reduce the overall tax rates compared to many other states.
So how are Maryland taxes structured to capture more taxes at a lower rate than many other states? Here’s a closer look at Maryland state tax and how it might affect you.
| Maryland State Taxes | |
| Rate Range of Taxes | 0% to 16% |
| Income Tax Rate Range | 3.75% to 8.95% |
| Sales Tax Rate | 6% |
| Effective Property Tax Rate | 1.085% |
| Estate Tax Rate Range | 0% to 16% |
Maryland Income Taxes
The state income tax in Maryland has a top rate of 5.75 percent, but any income earned is taxed at a rate of at least 2 percent at the state level.
| 2017 Maryland Income Tax Rates: Filing as Single | |
| Income | Tax Rate |
| $0 to $1,000 | 2% |
| $1,000 to $2,000 | 3% |
| $2,000 to $3,000 | 4% |
| $3,000 to $100,000 | 4.75% |
| $100,000 to $125,000 | 5% |
| $125,000 to $150,000 | 5.25% |
| $150,000 to $250,000 | 5.50% |
| Over $250,000 | 5.75% |
| 2017 Maryland Income Tax Rates: Married Filing Jointly | |
| Income | Tax Rate |
| $0 to $1,000 | 2% |
| $1,000 to $2,000 | 3% |
| $2,000 to $3,000 | 4% |
| $3,000 to $150,000 | 4.75% |
| $150,000 to $175,000 | 5% |
| $175,000 to $225,000 | 5.25% |
| $225,000 to $300,000 | 5.50% |
| Over $300,000 | 5.75% |
Depending on where you live in Maryland, however, that rate will be higher by between 1.75 percent and 3.2 percent due to county income taxes. Income tax at the county level is relatively uncommon, with most states funding local governments through other avenues.
| Local Tax Area | 2017 Tax Year | 2018 Tax Year |
| Allegany County | 3.05% | 3.05% |
| Anne Arundel County | 2.5% | 2.5% |
| Baltimore City | 3.2% | 3.2% |
| Baltimore County | 2.83% | 2.83% |
| Calvert County | 3% | 3% |
| Caroline County | 2.73% | 2.73% |
| Carrol County | 3.03% | 3.03% |
| Cecil County | 2.8% | 3% |
| Charles County | 3.03% | 3.03% |
| Dorchester County | 2.62% | 2.62% |
| Frederick County | 2.96% | 2.96% |
| Garrett County | 2.65% | 2.65% |
| Harford County | 3.06% | 3.06% |
| Howard County | 3.2% | 3.2% |
| Kent County | 2.85% | 2.85% |
| Montgomery County | 3.2% | 3.2% |
| Prince George’s County | 3.2% | 3.2% |
| Queen Anne’s County | 3.2% | 3.2% |
| St. Mary’s County | 3% | 3% |
| Somerset County | 3.2% | 3.2% |
| Talbot County | 2.4% | 2.4% |
| Washington County | 2.8% | 2.8% |
| Wicomico County | 3.2% | 3.2% |
| Worcester County | 1.75% | 1.75% |
| Nonresidents | 1.75% | 1.75% |
All told, state income taxes cost the typical Marylander a little over $3,500 a year.
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Maryland Sales Tax
The Maryland tax rate on the sale of goods is a flat 6 percent without any additional local rates.
| Maryland Sales Tax | |
| Statewide Sales Tax Rate | 6% |
Like most states, Maryland exempts a variety of goods from sales tax, most notably food that’s not prepackaged but intended for consumption at a different location.
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Maryland Property Tax
The Maryland tax rate on property is assessed at the local level, so your rate will depend entirely on where you live. That said, the effective rate statewide comes to 1.085 percent.
| Maryland Local Property Tax Rates | |
| County | Average Effective Rate |
| Allegany | 1.17% |
| Anne Arundel | 0.83% |
| Baltimore City | 1.52% |
| Baltimore | 1.11% |
| Calvert | 0.97% |
| Caroline | 0.97% |
| Carroll | 1.05% |
| Cecil | 1.06% |
| Charles | 1.13% |
| Dorchester | 1.05% |
| Frederick | 1.19% |
| Garrett | 0.82% |
| Harford | 1.10% |
| Howard | 1.18% |
| Kent | 0.93% |
| Montgomery | 0.93% |
| Prince George’s | 1.38% |
| Queen Anne’s | 0.84% |
| Somerset | 0.95% |
| St. Mary’s | 0.88% |
| Talbot | 0.59% |
| Washington | 1.08% |
| Wicomico | 0.98% |
| Worcester | 0.80% |
The highest potential property tax in Maryland hits the residents of Baltimore City County at 1.52 percent, while the lowest rate is paid by those living in Talbot County, where the effective rate is just 0.59 percent.
Maryland Inheritance and Estate Tax
Maryland is the one state in the country that has both an estate tax and an inheritance tax in place. But don’t worry about having to pay taxes twice on the same estate as you can credit any inheritance taxes owed against the ultimate estate tax bill.
Maryland’s estate tax is paid at a flat rate of 16 percent on any and all estates valued at $4 million or more. That threshold is temporary, though. As of Jan. 1, 2019, Maryland will switch to the federal definition for what constitutes a “taxable estate,” boosting the level to $11.18 million with increases to adjust for inflation.
Maryland inheritance tax, meanwhile, varies depending on how the people receiving the inheritance are related to the deceased individual. Fortunately, the Maryland tax code keeps this relatively simple with just two different categories for deaths that occur on or after July 1, 2000:
- Property passing to a child or other direct descendant, spouse, parent, grandparent or sibling is exempt from taxation
- Property passing to all other individuals is taxed at a 10 percent rate
More on Money and Taxes
- These 15 Countries Pay More in Taxes Than Americans
- How Much Money You Would Have If You Never Paid Taxes
- Types of Taxes and Why You Have to Pay Them
