Maryland

Tax Rate Range: Low - 2%; High - 4.75%; Maryland counties and Baltimore City may levy an income tax ranging from 1.25% to 3.15% of taxable income. Click here for local rates.
Income Brackets: Lowest - $1,000; Highest - $3,000
Number of Brackets: 4
Personal Exemptions: Single - $2,400; Married - $4,800; Dependents - $2,400
Additional Exemptions: 65 or older - $1,000 each additional dependent
Standard Deduction: $1,500 or 15% of Maryland adjusted gross income to maximum of $3,000 for single returns; $2,000 to $4,000 for married filing jointly.
Medical/Dental Deduction: Federal amount
Federal Income Tax Deduction: None
Retirement Income Taxes: Social Security and Railroad Retirement income are exempt. Pensions are exempt up to $22,600, minus amount of Social Security received and Railroad Retirement benefits. Out-of-state government pensions do not qualify for the exemption. Military pensioners are eligible for an additional pension exemption of up to $2,500. To qualify they must have a federal adjusted gross income of $22,500 or less. Click here for details.

State Tax Software

Retired Military Pay: Up to $5,000 may be exempt if retiree is over 55 and meets gross income limit. Some retirement pay may be excluded for those 65 and older or totally disabled. Survivor benefits are taxable. Click here for details.
Military Disability Retired Pay: Disability Portion - Length of Service Pay; Member on September 24, 1975 - No tax; Not Member on September 24, 1975 - Taxed, unless combat incurred. Retired Pay - Based solely on disability: Member on September 24, 1975 - No tax; Not Member on September 24, 1975 - Taxed, unless all pay based on disability and disability resulted from armed conflict, extra-hazardous service, simulated war, or an instrumentality of war.
VA Disability Dependency and Indemnity Compensation: Not subject to federal or state taxes
Military SBP/SSBP/RCSBP/RSFPP: Generally subject to state taxes for those states with income tax. Check with state department of revenue office.

Sales Taxes

State Sales Tax: 5.0% (food, prescription and non-prescription drugs exempt)
Gasoline Tax: 23.5 cents/gallon
Diesel Fuel Tax: 24.3 cents/gallon
Cigarette Tax: $1.00/pack of 20

Property Taxes

Real property is valued at its full cash value. Property tax rates vary widely. No restrictions or limitations on property taxes are imposed by the state, meaning cities and counties can set tax rates at the level they deem necessary to fund governmental services. These rates can increase, decrease or remain the same from year to year.
The Homeowners' Property Tax Credit Program (circuit breaker) allows credits against the homeowner's property tax bill if the property taxes exceed a fixed percentage of the person's gross income. In other words, it sets a limit on the amount of property taxes any homeowner must pay based upon his or her income. The plan was called circuit breaker because it shut off the property tax at a certain point just like an electric circuit breaker shuts off the current when the circuit becomes overloaded. It provides annual property tax credits to homeowners who qualify by reason of income. It has no relationship to age. To be eligible, a person must own their property, live in it for at least six months a year, and have a net worth, not including the value of the property on which you are seeking the credit, of less than $300,000.
A property tax deferral program allows property owners 65 or over to defer the increase in their property tax bill. Local governments must approve the program. The deferred taxes become a lien on the property and must be repaid when the property is transferred. A Renters' Tax Credit program provides up to $750 a year for those age 60 and over or 100% disabled if they qualify on the basis of income.
For details on property taxes, click here or call 410-767-1184.

Estate Taxes

Inheritance and Estate Taxes
Maryland collects an inheritance tax. Property passing to a spouse, child or other lineal descendent, spouse of a child or other lineal descendant, parent, grandparent or sibling, is exempt from taxation. Property passing to other individuals is subject to a 10% tax rate. The Maryland estate tax is now decoupled from the Federal estate tax. Estates above $1,000,000 will be subject to the Maryland estate tax even though they may not be subject to Federal estate tax. Senate Bill 508, which became effective on 7/1/04, retroactively applies to the estates of decedents dying after 12/31/03. For more information on inheritance taxes click here. For estate tax information, click here.
For further information, visit the Maryland Comptroller of the Treasury site.