How does Maryland's local income tax work?

Every Maryland resident pays both a state income tax and a local income tax to their county or incorporated city. The local tax is calculated on the same Maryland taxable income base as the state tax — after the standard deduction, personal exemptions, and dependent exemptions are applied. Local rates are set by each county/city government and range from 2.25% to 3.20%. The local tax appears on your Maryland Form 502 as a separate line and is collected by the state along with your state tax. Baltimore City has city-level income tax in addition to state tax; all other Maryland residents pay county tax.

Which Maryland county has the lowest income tax rate?

Carroll County and Worcester County both have the lowest local income tax rate in Maryland at 2.25%. For a married couple with $200,000 in Maryland taxable income, the difference between living in Carroll County (2.25%) vs. Baltimore City (3.20%) is approximately $1,900 per year in local income tax alone. Over 10 years at the same income level, that's $19,000 in cumulative tax savings — not counting any income growth. Talbot County (2.40%) and Garrett County (2.65%) are the next lowest.

Is Social Security income taxable in Maryland?

No. Maryland does not tax Social Security benefits at all — they are fully excluded from Maryland Adjusted Gross Income. This is a significant benefit for retirees compared to states that fully tax SS. Additionally, military retirement income is exempt from Maryland income tax for qualifying retirees. Maryland does tax most other retirement income (IRA distributions, 401(k) withdrawals, most pensions), though there is a modest pension exclusion for certain state and local government pensions.

What is the Maryland standard deduction?

Maryland's standard deduction is 15% of Maryland Adjusted Gross Income, subject to minimum and maximum limits by filing status. For single filers, the deduction ranges from a minimum of $1,750 to a maximum of $2,750. For married filing jointly, the range is $3,500 minimum to $5,500 maximum. Head of Household filers use the MFJ limits. This is much smaller than the federal standard deduction ($15,000 single / $30,000 MFJ for 2026), which means itemizing is more commonly beneficial at the state level for Maryland taxpayers who pay significant property taxes or mortgage interest.

Can I save money by moving to a different Maryland county?

Yes — within Maryland, choosing the right county can save a meaningful amount each year in local income tax. The table in this calculator ranks all 24 jurisdictions by total Maryland tax burden and shows the annual savings vs. your current county. For high-income Maryland residents (taxable income $200K+), the spread between cheapest and most expensive county is $1,900+ per year. Moving from Baltimore City to Carroll County saves nearly $1,900/year on $200K of taxable income — $19,000+ over 10 years, purely from local tax rate differences.

Tax

Maryland Local Income Tax Calculator — Compare All 24 Counties

Calculate your Maryland state and local income tax for all 24 counties simultaneously — and see exactly how much you would save by moving to a lower-rate jurisdiction.

By The FinCalc TeamUpdated May 30, 2026

Maryland is unique among US states in that every resident pays both a Maryland state income tax and a local income tax to their county or city — on the same Maryland taxable income base. Local rates range from 2.25% (Carroll County and Worcester County) to 3.20% (Baltimore City and 8 other jurisdictions), creating nearly a 1% spread depending on where you live. This calculator computes your state and local taxes for all 24 Maryland jurisdictions simultaneously, ranks them by total tax burden, and shows exactly how much you would save by moving.

How Maryland Local Income Tax Works

Two Taxes on the Same Income

Maryland income tax has two components that every resident pays simultaneously:

1. Maryland State Income Tax A bracketed rate ranging from 2% (first $1,000) to 5.75% (over $250,000 for single filers). The brackets are the same for all counties — your county does NOT affect state tax.

2. Maryland Local Income Tax A flat rate set by your county/city, applied to the same Maryland taxable income as the state tax. Rates range from 2.25% to 3.20% — a nearly 1% spread.

The total Maryland tax is state + local, both applied to the same taxable income base.

The Deduction and Exemption Stack

Maryland taxable income is calculated as:

Start with Maryland AGI (federal AGI minus SS income and other MD-specific adjustments)
Subtract Maryland standard deduction (15% of MD AGI, subject to min/max by filing status)
Subtract personal exemptions ($3,200 per exemption)
Subtract dependent exemptions ($3,200 per dependent)
Result = Maryland Taxable Income (same base for both state and local tax)

Local Rate Comparison (2025–2026)

| County | Local Rate | |--------|-----------| | Carroll County | 2.25% (lowest) | | Worcester County | 2.25% (lowest) | | Talbot County | 2.40% | | Garrett County | 2.65% | | … | … | | Baltimore City | 3.20% (highest) | | Howard County | 3.20% (highest) | | Montgomery County | 3.20% (highest) |

When to Use This Calculator

When deciding where to live in Maryland — the local income tax rate is a real ongoing cost. Use the county comparison table to quantify the tax difference between your shortlisted locations.

When planning retirement in Maryland — Social Security exclusion means Maryland AGI for retirees can be significantly lower than federal AGI. Model your actual Maryland tax burden with the correct income inputs.

When estimating Maryland withholding on a new job — the local rate depends on where you live, not where you work. Maryland employers withhold at the rate for your county of residence.

When comparing Maryland to no-income-tax states — for high earners, the combined Maryland state + local rate (up to 8.95%) is among the highest in the Mid-Atlantic region. Use the Retirement State Tax Comparison calculator alongside this one.

Related Calculators

Retirement State Tax Comparison — compare Maryland's total retirement tax burden vs. Florida, Texas, and other states
NJ ANCHOR Property Tax Relief Calculator — if you're comparing NJ and MD residency, check NJ's property tax relief programs

Understanding the Inputs

Maryland AGI: Maryland Adjusted Gross Income is your starting point — but it differs from federal AGI in important ways. Most importantly, Maryland does NOT tax Social Security benefits, so SS income is fully excluded from Maryland AGI. Military retirement income is also fully exempt for qualifying retirees. Other differences include Maryland's conformity to certain federal deductions at different amounts. For most W-2 employees, Maryland AGI closely matches federal AGI. For retirees, the difference can be substantial — if $40,000 of your $120,000 federal AGI is Social Security, your Maryland AGI starts at $80,000 before any other adjustments.
Filing Status: Maryland uses four filing statuses: Single, Married Filing Jointly, Head of Household, and Married Filing Separately. Filing status affects Maryland's standard deduction limits and the state income tax brackets — particularly the thresholds at which higher rates apply. Married filing jointly uses wider brackets than single filers. Head of Household brackets fall between single and MFJ. Unlike the federal system, Maryland does not have an alternative minimum tax for most taxpayers.
Personal Exemptions: Maryland allows a personal exemption of $3,200 per person. Single filers typically claim 1 exemption; married filing jointly typically claim 2 exemptions (one per spouse). Each exemption directly reduces Maryland taxable income by $3,200, providing tax savings of approximately $192/year for a taxpayer in the 6% bracket. Unlike federal exemptions (which were eliminated by the TCJA), Maryland retained its personal exemption system.
Dependent Exemptions: An additional $3,200 Maryland exemption is allowed for each qualifying dependent — the same amount as the personal exemption. A family of four with two working adults and two children can claim 4 total exemptions ($12,800 reduction in Maryland taxable income), saving approximately $768/year in the 6% state bracket plus proportional local tax savings depending on their county.
Current County / City: Your current county determines your local income tax rate. The "vs Current County" column in the comparison table shows how much more or less you would pay in each other county compared to your current location. Positive values (green) mean a move to that county would save you money; negative values (red) mean it would cost more. The difference between the cheapest county (Carroll County or Worcester County at 2.25%) and the most expensive (Baltimore City at 3.20%) is nearly 1% of Maryland taxable income.

Frequently Asked Questions

Related Calculators

NJ ANCHOR Property Tax Relief Calculator — Homeowner & Renter Benefits

Tax

Retirement State Tax Comparison — Best States to Retire for Taxes

Retirement & Investing

Florida Save Our Homes Portability Calculator

Tax

The FinCalc Team

Personal Finance Experts

The FinCalc team is a group of personal finance writers, analysts, and engineers dedicated to building accurate, transparent financial calculators. Every formula is verified against industry standards and explained in plain language.

Last reviewed and updated: May 30, 2026