State & Local Taxes
Maryland State Income Tax: 2026 Rates and Local Add-Ons
Maryland state income tax uses a graduated schedule that runs from 2% to 6.5% for tax year 2026, and every resident also owes a mandatory county or Baltimore City income tax on top of that, ranging from 2.25% to 3.30%. Two new high-earner brackets (6.25% and 6.50%) took effect for tax years beginning after December 31, 2024, under the Budget Reconciliation and Financing Act of 2025. The combined top marginal rate can reach roughly 9.8% for a high earner in the highest-rate county.
Maryland state income tax rates for 2026
Maryland taxes individual income across 10 brackets for 2026, from 2% on the first $1,000 of taxable income up to 6.5% on income above $1 million (single) or $1.2 million (married filing jointly). The rate schedule is progressive, so each rate applies only to the income that falls inside that bracket. Thresholds differ by filing status.
| Rate | Single / MFS / Dependent | Married Filing Jointly / HOH / QSS |
|---|---|---|
| 2.00% | $0 to $1,000 | $0 to $1,000 |
| 3.00% | $1,001 to $2,000 | $1,001 to $2,000 |
| 4.00% | $2,001 to $3,000 | $2,001 to $3,000 |
| 4.75% | $3,001 to $100,000 | $3,001 to $150,000 |
| 5.00% | $100,001 to $125,000 | $150,001 to $175,000 |
| 5.25% | $125,001 to $150,000 | $175,001 to $225,000 |
| 5.50% | $150,001 to $250,000 | $225,001 to $300,000 |
| 5.75% | $250,001 to $500,000 | $300,001 to $600,000 |
| 6.25% | $500,001 to $1,000,000 | $600,001 to $1,200,000 |
| 6.50% | Over $1,000,000 | Over $1,200,000 |
These are marginal rates. A single filer with $120,000 of Maryland taxable income pays 4.75% only on the slice between $3,001 and $100,000, then 5% on the next $20,000, not 5% on the whole amount. For most middle-income households, the effective state rate lands well below the 4.75% headline bracket that covers the widest income band.
The new 6.25% and 6.50% high-earner brackets
Maryland added two brackets above the long-standing 5.75% top rate for tax years beginning after December 31, 2024. The 6.25% rate applies to taxable income from $500,001 to $1,000,000 (single) or $600,001 to $1,200,000 (joint), and 6.50% applies above those ceilings. The 5.75% bracket was capped rather than removed.
These changes came through Chapter 604 of the 2025 Acts. Because the increases were enacted mid-year but applied retroactively to January 1, 2025, the state waived interest for underpayment of estimated tax for tax year 2025 where the shortfall would not have existed but for the new rates. High earners planning 2026 payments may want to revisit their estimated tax payments to account for the higher marginal exposure.
The same act layered an additional 2% tax on net capital gains for individuals with federal adjusted gross income (FAGI) above $350,000, subject to certain exceptions, also effective for tax years beginning after December 31, 2024. That surtax sits on top of the ordinary bracket rate that Maryland already applies to capital gains, since the state does not offer a separate preferential capital gains rate.
County and local income tax: the mandatory add-on
Every Maryland resident pays a local income tax to their county of residence (or to Baltimore City), collected on the same return as the state tax. For 2026 these rates range from 2.25% in Worcester County to 3.30% in Dorchester and Kent Counties. The general statutory cap rose to 3.30% for tax years beginning after December 31, 2025, up from 3.20%.
| County / jurisdiction | 2026 local rate |
|---|---|
| Worcester | 2.25% |
| Talbot | 2.40% |
| Garrett | 2.65% |
| Cecil | 2.74% |
| Washington | 2.95% |
| Carroll / Charles | 3.03% |
| Harford | 3.06% |
| Montgomery, Prince George’s, Howard, Baltimore City, Baltimore County | 3.20% |
| Dorchester, Kent | 3.30% |
Anne Arundel and Frederick Counties use tiered local rates that step up with income rather than a single flat rate, so a resident’s effective local rate there depends on taxable income. Because the local tax is added to the state schedule, a top-bracket filer in a 3.30% county can face a combined marginal rate near 9.8%, while a similar earner in Worcester County (2.25%) faces roughly 8.75%. Rates can change annually when a county notifies the Comptroller, so confirm your county’s current rate before filing.
Standard deduction and itemized deductions in 2026
Maryland’s standard deduction for 2026 is $3,350 for single, married-filing-separately, and dependent filers, and $6,700 for married-filing-jointly, head-of-household, and qualifying-surviving-spouse filers. The 2025 legislation set these fixed amounts, eliminated the old income-based phase-in, and indexes future amounts to cost-of-living adjustments.
Maryland’s standard deduction is far smaller than the federal figure, so many residents who take the federal standard deduction still itemize on their state return. You generally must use the same method (standard or itemized) on your Maryland return that you used federally, which shapes the choice between the standard and itemized deduction.
Higher earners face a new itemized deduction phase-out. Beginning in tax year 2025, filers with FAGI above $200,000 ($100,000 if married filing separately) must reduce otherwise-allowable itemized deductions by 7.5% of FAGI over that threshold. A single filer with $250,000 FAGI, for example, loses $3,750 of itemized deductions (7.5% of the $50,000 excess), which can push the net itemized amount below the standard deduction.
Who pays: residency and nonresident rules
Maryland taxes residents on all income and taxes nonresidents on income sourced to Maryland, such as wages earned or property located in the state. Residency generally turns on domicile or on maintaining a place of abode in Maryland for more than six months of the year (the 183-day statutory-resident test). Part-year residents file for the portion of the year they lived in the state.
Nonresidents pay a special nonresident tax in place of the county tax, set at the lowest county rate plus a statutory amount, so cross-border commuters are not exempt from the local-tax component entirely. When a nonresident sells Maryland real property, the settlement agent generally must withhold at 8.75% for individuals and fiduciaries, unless an exemption applies. Maryland has reciprocity agreements with several neighboring jurisdictions (including the District of Columbia, Pennsylvania, Virginia, and West Virginia) that can change where wage income is taxed, so the outcome depends on your state of residence.
FAQ
What is the Maryland state income tax rate for 2026?
Maryland’s state income tax rate for 2026 ranges from 2% to 6.5% across 10 graduated brackets. The 6.25% and 6.50% brackets are new high-earner rates that apply to taxable income above $500,000 (single) or $600,000 (joint). Separately, each resident owes a county or Baltimore City local income tax of 2.25% to 3.30%.
Does Maryland have a local income tax?
Yes. Maryland is one of the few states where every county and Baltimore City levies a mandatory local income tax, collected on the same return as the state tax. For 2026 the rates run from 2.25% (Worcester County) to 3.30% (Dorchester and Kent Counties). The rate is based on your county of residence, not where you work.
What is the combined top income tax rate in Maryland?
A top-bracket resident can face a combined marginal rate of roughly 9.8%: the 6.5% top state rate plus a 3.30% local rate in the highest-rate counties. The exact figure depends on your county of residence and taxable income. Residents in lower-rate counties, such as Worcester at 2.25%, face a combined top rate closer to 8.75%.
What is the Maryland standard deduction for 2026?
The 2026 Maryland standard deduction is $3,350 for single and married-filing-separately filers and $6,700 for married filing jointly and head of household. These amounts are now fixed and indexed to inflation. Because they are much lower than the federal standard deduction, many Maryland residents itemize on their state return even when they take the federal standard deduction.
How is the new 2% capital gains tax applied in Maryland?
For tax years beginning after December 31, 2024, Maryland adds a 2% tax on net capital gains for individuals with federal adjusted gross income above $350,000, subject to certain exceptions. It applies on top of the ordinary bracket rate, since Maryland does not tax capital gains at a separate preferential rate. Whether it applies depends on your FAGI and the nature of the gain.
Do nonresidents pay Maryland income tax?
Nonresidents pay Maryland tax on Maryland-sourced income, such as wages earned in the state or gains on Maryland property, plus a special nonresident tax that replaces the county tax. Reciprocity agreements with the District of Columbia, Pennsylvania, Virginia, and West Virginia can shift where wage income is taxed, so the result depends on your state of residence.
Maryland’s structure differs sharply from neighboring states. For comparison, see how the numbers work in Virginia and how state-level tax fits alongside the federal system in our overview of state vs federal income tax.
Reviewed by The Ledgerism Editorial Team. Last reviewed: July 2026.