Maryland Tax Guide (2026)
Comprehensive statutory analysis of Maryland individual income tax rates, Department of Revenue filing forms, extension guidelines, telecommuting sourcing rules, and pass-through entity tax provisions.
Key Statutory Tax Parameters (Maryland, 2026)
2026 Legislative & Statutory Highlights
Maryland features an 8-bracket graduated state tax with a top rate of 5.75%. Crucially, Maryland mandates that every resident also pay a piggyback Local County Income Tax ranging from 2.25% to 3.20% (e.g., Montgomery County levies 3.20%, Baltimore City levies 3.20%), bringing the effective top combined marginal tax rate to 8.95%.
Maryland operates a graduated personal income tax schedule with marginal brackets reaching up to 6.5%. Tax parameters are indexed annually or enacted through state legislative sessions. Taxpayers should ensure that adjustments for federal bonus depreciation, Section 179 expensing, and Net Operating Loss (NOL) carryforwards follow Maryland's specific rolling or static Internal Revenue Code conformity date.
Filing Forms, Deadlines & Extension Guidelines
Multi-State Workers & Telecommuting Sourcing Rules
Maryland taxes residents on all income. Maryland has reciprocal agreements with DC, Pennsylvania, Virginia, and West Virginia, exempting commuting cross-border workers.
Pass-Through Entity (PTE) Tax & Small Business Rules
Maryland offers an elective Pass-Through Entity Tax allowing partnerships and S-corps to pay tax at the state rate plus the top local rate (8.95% total) at the entity level.
Estate & Inheritance Tax
Maryland is the only state in the country that levies BOTH a state estate tax (with a $5,000,000 exemption) AND a state inheritance tax (up to 10% on collateral heirs).
Local & County Taxes
Mandatory local county tax (2.25% to 3.20%) is filed and collected directly on the state Form 502 return.
Worked Tax Example: $120,000 W-2 Earner in Maryland
A single filer in Montgomery County earning $120,000 pays approximately $5,680 in state income tax plus $3,640 in county local tax, totaling $9,320 in combined state/local tax (7.77% combined).
Calculate Your 2026 Maryland Tax Liability
Enter your taxable income, filing status, and municipal details below to calculate your customized state tax liability and print your executive summary.
Local income tax
Graduated system, top state rate 6.50% (Tax Foundation); plus a 2% surtax on capital gains above $350k AGI (2025+). In addition, every resident owes a county/city income tax (local entry). Reciprocity with PA, VA, WV.
⚠ Some figures for this state are not yet fully verified — confirm with the state Department of Revenue before relying on them.
2026 Executive Maryland State Tax Audit Summary
Not tax, legal, or financial advice
FiscTalk provides general educational information from public sources. Your tax results depend on the full set of facts, your filing history, and the jurisdiction-specific rules that shift yearly. Before filing or making decisions, consult a licensed CPA, EA, or attorney. FiscTalk is not a fiduciary and is not affiliated with the IRS or any state agency.
Sources & methodology
Frequently Asked Questions: Maryland Taxes
Source-verified — not professional advice
Every figure on this page is checked in-house against its primary source — IRS revenue procedures and publications, state Departments of Revenue, and the text of the underlying statute — before publication. Last reviewed 2026-10-20. The full source list is at the bottom of this page. If you spot an error, see our corrections & standards policy.
Not tax, legal, or financial advice
FiscTalk provides general educational information from public sources. Your tax results depend on the full set of facts, your filing history, and the jurisdiction-specific rules that shift yearly. Before filing or making decisions, consult a licensed CPA, EA, or attorney. FiscTalk is not a fiduciary and is not affiliated with the IRS or any state agency.
Sources & methodology