Maryland State Income Tax Withholding
Last Updated: January 2026
Overview
Maryland imposes a progressive state income tax with ten brackets. For 2026, two new top brackets have been added for high-income earners. Additionally, all Maryland counties and Baltimore City impose mandatory local income taxes, making Maryland unique in requiring both state and local withholding for all employees.
2026 Tax Rates
State Tax Rates
| Taxable Income | Rate |
|---|---|
| $0 - $1,000 | 2.00% |
| $1,001 - $2,000 | 3.00% |
| $2,001 - $3,000 | 4.00% |
| $3,001 - $100,000 | 4.75% |
| $100,001 - $125,000 | 5.00% |
| $125,001 - $150,000 | 5.25% |
| $150,001 - $250,000 | 5.50% |
| $250,001 - $500,000 | 5.75% |
| $500,001 - $1,000,000 | 6.25% |
| Over $1,000,000 | 6.50% |
Note: The 6.25% and 6.50% brackets are new for 2026.
Local Tax Rates (Required)
Every Maryland employee must have local tax withheld based on their county of residence:
| Jurisdiction | Rate |
|---|---|
| Allegany County | 3.03% |
| Anne Arundel County | 2.81% |
| Baltimore City | 3.20% |
| Baltimore County | 3.20% |
| Calvert County | 3.20% |
| Caroline County | 3.20% |
| Carroll County | 3.03% |
| Cecil County | 2.74% |
| Charles County | 3.03% |
| Dorchester County | 3.30% |
| Frederick County | 2.96% |
| Garrett County | 2.65% |
| Harford County | 3.06% |
| Howard County | 3.20% |
| Kent County | 3.20% |
| Montgomery County | 3.20% |
| Prince George's County | 3.20% |
| Queen Anne's County | 3.20% |
| St. Mary's County | 3.20% |
| Somerset County | 3.20% |
| Talbot County | 2.40% |
| Washington County | 2.95% |
| Wicomico County | 3.20% |
| Worcester County | 2.25% |
Non-residents: If an employee lives outside Maryland, withhold at the lowest local rate of 2.25%.
Deductions and Exemptions
Standard Deduction:
- Minimum: $1,800
- Maximum: 15% of Maryland AGI up to $2,700
Personal Exemption: $3,200 per person
Special Considerations
Required State Form
Maryland requires Form MW507 (Employee's Maryland Withholding Exemption Certificate). The federal Form W-4 is not accepted for Maryland purposes.
Form MW507 collects:
- County of residence (critical for local tax rate)
- Number of exemptions
- Additional withholding amounts
Local Tax Determination
The employee's county of residence determines the local tax rate, not the work location. Employers must:
- Verify employee's county of residence on Form MW507
- Apply the correct local rate from the table above
- Update withholding if the employee moves to a different county
Combined Withholding
Maryland state and local taxes are typically reported and paid together, though they appear as separate line items on the employee's pay stub.
Electronic Filing
All employers must file and pay electronically regardless of size.