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Maryland State Tax

Maryland State Tax There are a number of taxes applicable to the state of Maryland, which includes sales tax, five income brackets for personal income taxation as well as local taxes.  Tax returns are due on April 15.

Maryland state sales tax – 6%, no local sales tax (food, prescription drugs, clothing up to $175, and utilities such as gas, oil and electricity are exempt)

Maryland state personal income tax 

Eight income brackets for single filings

2% - first $1,000 of taxable income

3% - $1,001 - $2,000

4% - $2,001 - $3,000

4.75% - $3,001 - $150,000

5% - $150,001 - $300,000

5.25% - $300,000 - $500,000

5.5% - $500,001 – 1 million

6.25% - $1 million+

Counties and municipalities may add taxes from 1.25% to 3.20% to “piggyback” on state rates.  Baltimore city, for example, levies a tax of 3.05% on top of Maryland state taxes.

Maryland state excise taxes

Taxes assessed on vehicles, alcohol, tobacco, gasoline and are in addition to federal excise taxes. 

$2.00 per package of 20 cigarettes, 

$1.50 tax per gallon of liquor

$.09 per gallon barrel of beer

$.40 per gallon of wine

$.235 a gallon on gasoline , $.24.3 on diesel

Maryland inheritance tax 

Maryland exempts taxation if the estate passes to a spouse, child and/or relative of lineal descent, parent, grandparent or sibling.  Any other transfer of estate is subject to a 10% tax rate.  A tax return must be filed if the estate exceeds $1,000,000.  This estate is taxed at 16%.

Maryland payroll taxes

State Disability Insurance – none

State Unemployment Insurance – 1.32% to 12.33%, wage base is $8,500.  Employer contribution is 2.3% but if the employer is a construction firm form out of state, that rate is 9.4%

Maryland state property tax

Property must be assessed by Jan 1, annually and listed by March 15.  The Maryland State property tax is 11.2 cents per $100 of assessed value.  There is an additional assessment for local taxes, which ranges from $0.475 to $2.268.  The Homestead Credit caps tax increases at 10% or less and there is a homeowner’s property tax credit for homes under $60,000 in value.  Property tax bills are issued in July or August of each year.

Exemptions

Pension income exclusion stands at $23,600 for in certain cases.  There are also a number of personal income credits available, such as a credit for buying health insurance.

Corporate income tax

The corporate tax rate in Maryland is 8.25%.  This is modified if the corporation operates across multiple states.  Proceeds from the corporate tax are paid into the Higher Education Investment Fund.

Misc

Social Security, railroad retirement income are not taxed under Maryland law.  

Military personnel receiving their only income from the military pay will be exempt from taxes in Maryland.  If they receive income in Maryland, military pay will not be used in their income calculation.  They will not need to file tax returns.  Blind veterans and spouses also receive special property tax exemptions.

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