Maryland Tax and CPA Services: State, County and City Taxes

Maryland residents pay two income taxes on one return: a graduated state tax and a county tax set by the county where they live, including Baltimore City, which is treated like a county. That structure, together with a 6 percent sales tax and a high corporate rate, makes Maryland different from nearby states. For people who live in Maryland and work in Washington, DC, Virginia or Delaware, it also creates multi-state filing questions. We serve Maryland clients remotely from our Naperville, Illinois office.

State and county income tax

The General Assembly's Department of Legislative Services describes Maryland's state tax as graduated, taxed in brackets that rise with Maryland taxable income and differ by filing status. The brackets and rates are set by the General Assembly and have been adjusted in recent years, so use the Comptroller of Maryland's current-year tables before relying on a specific figure for 2025 or 2026.

Layered on top is the local income tax. Each county and Baltimore City levies it on its residents as a percentage of Maryland taxable income. Rates differ by county and are set locally; the Department of Legislative Services reported a range of roughly 2.25 percent to 3.2 percent for tax year 2022, and counties can change them. A county may use brackets if it sets them by ordinance and tells the Comptroller by July 1. Incorporated municipalities generally share in the county's income tax revenue, receiving the greater of 17 percent of the county tax liability of their residents or a small percentage of the Maryland taxable income of their residents. Check the current rate for your county; it is based on where you live at year end.

Practical points:

• Commuters: a Maryland resident who works in DC still files in Maryland, and DC requires its own residents to file in DC even if they work in Maryland or Virginia. Our page on the District of Columbia explains the DC side.
• Remote workers and movers: the county matters, so moving between counties changes the local tax.
• Visa holders: people on H-1B or other visas who live in Maryland file as residents or part-year residents depending on their dates; see our multi-state tax service.

Business taxes

Maryland applies a tax rate of 8.25 percent to corporate Maryland taxable income, a rate it raised from 7 percent. In 2020 the state authorized pass-through entities to elect to be taxed at the entity level, and owners may claim a credit for their share of tax paid by the entity, which gives partnerships and S corporations a way to address the federal limit on the state and local tax deduction. See SALT deduction and property taxes. The Comptroller's business tax services page covers withholding, sales and use tax, pass-through entity filing, and forms. Maryland has nexus rules for out-of-state companies selling into the state, so review sales tax nexus if you sell to Maryland customers.

Sales and use tax

Maryland's sales and use tax rate has been 6 percent since January 3, 2008. Maryland has no county or city sales tax, so the base rate is the same statewide. Out-of-state sellers should check registration and filing requirements on the Comptroller's website. See our sales tax service.

Payroll in Maryland

• Withholding: employers withhold Maryland income tax, which has a state and a county component, and file through the Comptroller. See state income tax withholding.
• Unemployment insurance: the Maryland Department of Labor says taxable wages are the first $8,500 earned by each employee in a calendar year. Contributory employers' rates range from 0.30 percent to 7.50 percent. New employers' rates range from 1.0 percent to 2.6 percent. Table A is in effect for 2026, the same table as 2025. Interest on late contributions is 1.5 percent per month. See state unemployment insurance.
• Paid family and medical leave: Maryland has enacted a family and medical leave insurance program, but confirm its current start dates with the state before assuming an employer or employee contribution applies. See state paid family and medical leave.

Counties, Baltimore City and property tax

Maryland has 23 counties plus Baltimore City, and each sets its own local income tax rate and many local property tax credits. Property assessments are handled by the state's Department of Assessments and Taxation, while counties and municipalities set property tax rates and send bills. The Department of Legislative Services publishes a guide to each county's taxing authority, including property tax credits, transfer and recordation taxes, and special taxing districts. Employers with staff in more than one county should set up county withholding correctly; see local payroll taxes by city and county. For the nearby metro, see our Washington DC metro page and the neighboring state of Delaware.

How we can help

We prepare Maryland resident, part-year and nonresident returns, work out county tax for movers and commuters, evaluate the pass-through entity election, and set up Maryland payroll. For a notice from the Comptroller or the Department of Labor, see state tax notices and representation. Contact us to begin; this page is general information.

Frequently asked questions

General information only, not tax, legal or accounting advice for your situation. Rules, limits and deadlines change; confirm the current rules with the official source or a qualified professional before you act. Reading this page does not create a professional relationship with CPA Tax Payroll and Accounting Corp.