Maryland taxes

Maryland taxes personal income at 2% to 6.5%, and every county and Baltimore City adds its own income tax of 2.25% to 3.3% on the same income. A sole proprietor owes no separate business tax. LLCs, partnerships and corporations pay a $300 annual report fee. A partnership or S corporation must pay Maryland tax for owners who live outside Maryland, and C corporations pay 8.25% corporate income tax.

Personal income tax

Maryland residents file Form 502, due April 15, 2026. You can get a six-month extension to file, but not to pay: any tax you expect to owe is still due by April 15, 2026. The state rate climbs in 10 steps from 2% to 6.5%, and the top rate starts at $1,000,000 of taxable income, or $1,200,000 for married couples filing jointly and heads of household.

On top comes the local income tax, set by the county or Baltimore City you lived in on December 31, 2025. It runs from 2.25% to 3.3% and applies to the same taxable income as the state tax.

2025 brought new rules. The 6.25% and 6.5% top rates are new. The standard deduction is now a flat $3,350, or $6,700 for joint filers and heads of household. There is an extra 2% tax on capital gains once federal adjusted gross income passes $350,000, filed on Form 502CG. Itemized deductions shrink by 7.5% of income above $200,000.

Return

Form 502

Due date

April 15, 2026

State rates

2%, 3%, 4%, 4.75%, 5%, 5.25%, 5.5%, 5.75%, 6.25%, 6.5%

Local income tax

2.25% to 3.3%, by county or Baltimore City

Standard deduction

$3,350 single or married filing separately, $6,700 married filing jointly or head of household

Personal exemption

$3,200 per person, shrinking once federal income passes $100,000 single or $150,000 joint, and gone above $150,000 single or $200,000 joint

Age 65 or blind

$1,000 more each, at any income

Capital gains

An extra 2% once federal adjusted gross income passes $350,000

Pension exclusion

Up to $41,200, reduced by Social Security and Railroad Retirement benefits

Not taxed

Social Security and Railroad Retirement

Sole proprietor

A sole proprietor with no LLC pays Maryland no annual report fee. Maryland's own fee schedule charges a sole proprietorship nothing.

If the business owns or leases personal property in Maryland, it may still have to file the business personal property return, even though filing it costs nothing. Your business profit is taxed on your own Form 502, with the county tax on top.

Single-member LLC

Every Maryland LLC files Form 1, the annual report and business personal property return, each year, however few members it has. It is due April 15 and the fee is $300, owed whatever the business earned. It goes to the Department of Assessments and Taxation, not the Comptroller.

The fee is for the annual report. The personal property part of the form is free, though an LLC that owns or leases personal property in Maryland still has to fill it in. A business approved by MarylandSaves can have the fee waived. The LLC's profit is taxed on your own Form 502.

Partnership

A Maryland partnership files Form 510, the pass-through entity return, due the 15th day of the 4th month after its tax year ends. A partnership that chose to pay Maryland tax at the business level for all its partners files Form 511 instead. Filing Form 510 counts as a final decision to pay only for partners who live elsewhere.

That payment is not optional. If any partner lives outside Maryland, the partnership must pay that partner's Maryland tax itself: 6.50% plus a special nonresident tax of 2.25%, so 8.75% of the partner's Maryland share, or 8.25% for a partner that is itself a business. The partners then claim credit for it on their own Maryland returns.

The partnership also pays the $300 annual report fee every year, due April 15.

S corporation

A Maryland S corporation files Form 510, the pass-through entity return, due the 15th day of the 4th month after its tax year ends, or Form 511 if it chose to pay Maryland tax at the business level for all its shareholders.

If any shareholder lives outside Maryland, the corporation must pay that shareholder's Maryland tax: 8.75% of their Maryland share (6.50% plus a special nonresident tax of 2.25%), or 8.25% for a shareholder that is itself a business. The shareholders claim credit for it on their own returns. The $300 annual report fee is due every April 15.

C corporation

A C corporation files Form 500 and pays corporate income tax at 8.25% of the income apportioned to Maryland. A corporation selling into other states counts only its Maryland share, measured by Maryland sales over total sales.

It also pays the $300 annual report fee to the Department of Assessments and Taxation every year, due April 15, whatever it earned.

Return

Form 500

Corporate income tax

8.25% of Maryland income

Multi-state profit

Maryland sales over total sales

Annual report fee

$300 a year, due April 15

Estimate your state tax

Pick your business type and enter this year's numbers to see the state business tax Maryland charges. It assumes all your sales are in Maryland.

An estimate for planning, not tax advice.

Sources

• Maryland 2025 State & Local Tax Forms & Instructions (resident booklet)
• Maryland Form 502, 2025
• Maryland Form 502CG, Capital Gain Income, 2025
• egov.maryland.gov Business Express fee schedule (annual report fees by entity type)
• dat.maryland.gov Form 1 Annual Report and Business Personal Property Return, 2025 (fee table by entity type; 15 April; MarylandSaves waiver)
• marylandtaxes.gov Form 510 Pass-Through Entity Income Tax Return instructions, 2025 (who must file; the 6.50% + 2.25% and 8.25% nonresident taxes; Form 511 election)
• marylandtaxes.gov Form 500 Corporation Income Tax Return instructions, 2025 (who must file)
• marylandtaxes.gov Business Income Tax Information (corporation rate)
• marylandtaxes.gov Form 500 Schedule A, computation of apportionment factor
• taxes.marylandtaxes.gov Apportionment Factor

Last reviewed August 2026.