Maryland

Maryland top income tax rate is 6.5% on income above $1,200,000 (TY2025; BRFA 2025)

“For taxable year 2025, a Maryland income tax is imposed on the Maryland taxable income of an individual at the following rates: 2% on income to $1,000; 3% from $1,001 to $2,000; 4% from $2,001 to $3,000; 4.75% from $3,001 to $100,000; 5.0% from $100,001 to $125,000; 5.25% from $125,001 to $150,000; 5.5% from $150,001 to $250,000; 5.75% from $250,001 to $600,000; 6.25% from $600,001 to $1,200,000; and 6.5% above $1,200,000.”

Note: BRFA 2025 (Ch.604, retroactive to TY2025) added the 6.25% and 6.5% brackets. TF data that predates BRFA is stale for TY2025. Standard deduction $6,700 (TY2025).

Maryland 2% net capital gain surtax: all-or-nothing cliff when FAGI exceeds $350,000

“In addition to the tax imposed under §10-104, for taxable years beginning on or after January 1, 2025, a surtax of 2% is imposed on the net capital gain of an individual whose federal adjusted gross income for the taxable year exceeds $350,000.”

Note: The surtax applies to the full amount of net capital gain when the threshold is crossed; it is not limited to the portion of income above $350,000 (cliff, not marginal). The 2% surtax base is the federal IRC §1222(11) net capital gain (post-netting including carryover characters). Exceptions: primary residence gain <$1.5M, qualified retirement accounts, farm livestock, easements, §179 property.

Maryland 2% net capital gain surtax: all-or-nothing cliff when FAGI exceeds $350,000

“In addition to the tax imposed under §10-104, for taxable years beginning on or after January 1, 2025, a surtax of 2% is imposed on the net capital gain of an individual whose federal adjusted gross income for the taxable year exceeds $350,000.”

Note: The surtax applies to the full amount of net capital gain when the threshold is crossed; it is not limited to the portion of income above $350,000 (cliff, not marginal). The 2% surtax base is the federal IRC §1222(11) net capital gain (post-netting including carryover characters). Exceptions: primary residence gain <$1.5M, qualified retirement accounts, farm livestock, easements, §179 property.

Maryland county income tax (up to 3.2%) applies to capital gains on the same base

“Each county in Maryland may impose an income tax on every individual who is a resident of the county at a rate set by the county, not to exceed 3.2%.”

Note: County rate ceiling is 3.2% per §10-106; see county rate schedules for current rates. Representative rate for modeling: 3.20%. Combined top rate (state + county + 2% NCG surtax): 6.5% + 3.2% + 2% = 11.7% on NCG for high-FAGI MD residents.

IRC §1212(b): capital losses carry forward only for non-corporate taxpayers; no carryback

“In the case of a taxpayer other than a corporation, if there is a net capital loss for any taxable year: (1) the excess of the net short-term capital loss over the net long-term capital gain for such year shall be a short-term capital loss in the succeeding taxable year, and (2) the excess of the net long-term capital loss over the net short-term capital gain for such year shall be a long-term capital loss in the succeeding taxable year.”

Note: IRC §1212(b) limits non-corporate taxpayers to carrying losses forward only ('succeeding taxable year'). IRC §1212(a), which allows a 3-year carryback, applies only to corporations. For conformity states, the federal carryforward amount flows to the state return unchanged.

MD exempts MD-issued bonds; out-of-state muni bond interest added to MD income per §10-204(b)

“The addition under subsection (a) of this section includes interest or dividends, less related expenses, on the obligations of a state or political subdivision of a state other than this state.”

Note: §10-204(b) requires addition of out-of-state muni interest; MD-issued bonds exempt by negative implication (not covered by the addition provision).

MD exempts MD-issued bonds; out-of-state muni bond interest added to MD income per §10-204(b)

“The addition under subsection (a) of this section includes interest or dividends, less related expenses, on the obligations of a state or political subdivision of a state other than this state.”

Note: §10-204(b) requires addition of out-of-state muni interest; MD-issued bonds exempt by negative implication (not covered by the addition provision).

Maryland conforms to IRC §1400Z-2 QOZ gain deferral and exclusion

“Unless the context otherwise requires, the term 'federal taxable income' means federal adjusted gross income adjusted as provided in this title; provided, however, that it means the same as defined in the Internal Revenue Code of 1986, as amended from time to time.”

Note: Md. Code Ann., Tax-Gen. §1-101 defines Maryland taxable income and federal taxable income by rolling reference to the Internal Revenue Code as amended. This rolling conformity incorporates IRC §1400Z-2 (QOZ gain deferral and 10-year exclusion) without modification.

Maryland conforms to IRC §1202 QSBS gain exclusion; no addback

“For the purpose of computing Maryland taxable income, the term 'adjusted gross income' shall mean the same as defined in the Internal Revenue Code of 1986, as amended from time to time.”

Note: Md. Code Ann., Tax-Gen. §10-304 defines Maryland taxable income by rolling reference to federal adjusted gross income and the Internal Revenue Code as amended. This conformity incorporates IRC §1202 (QSBS gain exclusion) without modification; no state-level addback.

Maryland subtraction for U.S. government interest requires income be exempt from state taxes under federal law; FNMA and FHLMC have no such federal bondholder exemption

“An individual may subtract from Maryland adjusted gross income amounts that are required to be subtracted by the laws of the United States.”

Note: The §10-208(a)(2) subtraction requires exemption under federal law. FNMA (12 U.S.C. §§1719(e), 1723a(c)) and FHLMC (12 U.S.C. §1455(a)) have no bondholder exemption statute; only the corporation itself is exempt from Maryland taxation, not bondholders. No MD Comptroller named-entity publication found; confidence: medium based on structural statutory analysis.

Maryland top income tax rate is 6.5% on income above $1,200,000 (TY2025; BRFA 2025)

“For taxable year 2025, a Maryland income tax is imposed on the Maryland taxable income of an individual at the following rates: 2% on income to $1,000; 3% from $1,001 to $2,000; 4% from $2,001 to $3,000; 4.75% from $3,001 to $100,000; 5.0% from $100,001 to $125,000; 5.25% from $125,001 to $150,000; 5.5% from $150,001 to $250,000; 5.75% from $250,001 to $600,000; 6.25% from $600,001 to $1,200,000; and 6.5% above $1,200,000.”

Note: BRFA 2025 (Ch.604, retroactive to TY2025) added the 6.25% and 6.5% brackets. TF data that predates BRFA is stale for TY2025. Standard deduction $6,700 (TY2025).

U.S. Treasury interest exempt from Maryland income tax: 31 U.S.C. §3124(a) prohibits state taxation of U.S. government obligations

“Stocks and obligations of the United States Government are exempt from taxation by a State or political subdivision of a State. The exemption applies to each form of taxation that would require the obligation, the interest on the obligation, or both, to be considered in computing a tax.”

Note: 31 U.S.C. §3124(a) preempts state income taxation of U.S. government obligations. Covers T-bills, T-notes, T-bonds, TIPS, and I-bonds. Most states allow a deduction or subtraction by statute cross-referencing this federal preemption.

FHLB and FFCB bond interest exempt from Maryland income tax: federal enabling statutes mandate state tax exemption

“Any security issued under this chapter by a Federal home loan bank, including the stock thereof, shall be exempt from taxation, except taxes upon real estate, by any State, county, municipality, or local taxing authority.”

Note: 12 U.S.C. §1433 (FHLB) and 12 U.S.C. §2023 (FFCB/Farm Credit Act) both mandate state tax exemption for securities issued under their chapters. Contrasts with FNMA (12 U.S.C. §§1719(e), 1723a(c)) and FHLMC (12 U.S.C. §1455(a)) which have no bondholder exemption statute and whose interest is taxable by income-tax states.

Farm Credit Act: notes, bonds, debentures, and other obligations of Farm Credit Banks are instrumentalities of the United States exempt from all State, municipal, and local taxation

“The mortgages held by the Farm Credit Banks and the notes, bonds, debentures, and other obligations issued by the banks shall be considered and held to be instrumentalities of the United States and, as such, they and the income therefrom shall be exempt from all Federal, State, municipal, and local taxation, other than Federal income tax liability of the holder thereof under the Public Debt Act of 1941 (31 U.S.C. 3124).”

Note: 12 U.S.C. §2023 explicitly covers 'the income therefrom' (i.e., interest payments to bondholders), exempting it from all State and local taxation. The only carve-out is federal income tax on the holder. Parallel to 12 U.S.C. §1433 (FHLB Act), which exempts FHLB securities from state taxation. Together §1433 and §2023 mandate state and local tax exemption for both FHLB and FFCB bond interest. Shared across all jurisdictions: a single object reference satisfies buildCitationIndex() identity check.

IRC §1212(b): capital losses carry forward only for non-corporate taxpayers; no carryback

“In the case of a taxpayer other than a corporation, if there is a net capital loss for any taxable year: (1) the excess of the net short-term capital loss over the net long-term capital gain for such year shall be a short-term capital loss in the succeeding taxable year, and (2) the excess of the net long-term capital loss over the net short-term capital gain for such year shall be a long-term capital loss in the succeeding taxable year.”

Note: IRC §1212(b) limits non-corporate taxpayers to carrying losses forward only ('succeeding taxable year'). IRC §1212(a), which allows a 3-year carryback, applies only to corporations. For conformity states, the federal carryforward amount flows to the state return unchanged.

Maryland top income tax rate is 6.5% on income above $1,200,000 (TY2025; BRFA 2025)

“For taxable year 2025, a Maryland income tax is imposed on the Maryland taxable income of an individual at the following rates: 2% on income to $1,000; 3% from $1,001 to $2,000; 4% from $2,001 to $3,000; 4.75% from $3,001 to $100,000; 5.0% from $100,001 to $125,000; 5.25% from $125,001 to $150,000; 5.5% from $150,001 to $250,000; 5.75% from $250,001 to $600,000; 6.25% from $600,001 to $1,200,000; and 6.5% above $1,200,000.”

Note: BRFA 2025 (Ch.604, retroactive to TY2025) added the 6.25% and 6.5% brackets. TF data that predates BRFA is stale for TY2025. Standard deduction $6,700 (TY2025).

Maryland estate tax: graduated 0.8% to 16%; $5,000,000 exemption (fixed since 2019)

“the unified credit for Maryland estate tax purposes is $1,945,800 - the amount which effectively excludes the first $5.0 million of the taxable estate from tax”

Note: Maryland estate tax uses a $5,000,000 fixed exemption (implemented 2019; not inflation-adjusted; not linked to federal). Top rate 16% on MD taxable estate over approximately $10.04M. Rate schedule per pre-2001 federal state death tax credit table (0.8%-16%).

Maryland estate tax: graduated 0.8% to 16%; $5,000,000 exemption (fixed since 2019)

“the unified credit for Maryland estate tax purposes is $1,945,800 - the amount which effectively excludes the first $5.0 million of the taxable estate from tax”

Note: Maryland estate tax uses a $5,000,000 fixed exemption (implemented 2019; not inflation-adjusted; not linked to federal). Top rate 16% on MD taxable estate over approximately $10.04M. Rate schedule per pre-2001 federal state death tax credit table (0.8%-16%).

Maryland inheritance tax: direct or lineal heirs exempt; collateral heirs and unrelated parties taxed at 10% flat rate (TY2025)

“direct or lineal heirs are exempt from inheritance tax”

Note: Maryland imposes both an estate tax and a separate inheritance tax. Direct heirs (spouse, child, grandchild, stepchild, parent, grandparent, sibling, spouse of decedent's child, registered domestic partner) are exempt from the inheritance tax (Md. Code Ann., Tax-General § 7-203). Collateral heirs (niece, nephew, aunt, uncle, cousin) and unrelated parties are taxed at a flat 10% rate (§ 7-204). MD is unusual in imposing both taxes.

Maryland top income tax rate is 6.5% on income above $1,200,000 (TY2025; BRFA 2025)

“For taxable year 2025, a Maryland income tax is imposed on the Maryland taxable income of an individual at the following rates: 2% on income to $1,000; 3% from $1,001 to $2,000; 4% from $2,001 to $3,000; 4.75% from $3,001 to $100,000; 5.0% from $100,001 to $125,000; 5.25% from $125,001 to $150,000; 5.5% from $150,001 to $250,000; 5.75% from $250,001 to $600,000; 6.25% from $600,001 to $1,200,000; and 6.5% above $1,200,000.”

Note: BRFA 2025 (Ch.604, retroactive to TY2025) added the 6.25% and 6.5% brackets. TF data that predates BRFA is stale for TY2025. Standard deduction $6,700 (TY2025).

Maryland conforms to the federal capital-loss base; treatment of an imported pre-residency section 1212 carryforward is a structural inference

“The income tax does not apply to the income of: (1) a common trust fund, as defined in § 3-501(b) of the Financial Institutions Article”

Note: Md. Code Ann., Tax-Gen. §10-104 is the income tax applicability section (it enumerates entities the tax does not reach); quote verbatim from the live mgaleg.maryland.gov page. Maryland taxable income otherwise starts from federal adjusted gross income (Tax-Gen. §10-203 et seq.), so the federal section 1212 capital-loss carryover flows through, but the cited section does not itself address the imported pre-residency carryforward, which remains a structural inference.

Maryland PTET is elective: the pass-through entity may elect to pay the tax on all members' distributive or pro rata shares

“may elect to pay the tax imposed under paragraph (1) of this subsection with respect to the distributive shares or pro rata shares of all members”

Maryland elective PTET rate on individual members: the §10-106.1 special rate (2.25%) plus the top marginal individual rate (5.75%), i.e. 8%; 8.25% on entity members

“a rate equal to the sum of the rate of the tax imposed under § 10-106.1 of this subtitle and the top marginal State tax rate for individuals under § 10-105(a)”

Note: SALT-cap workaround: on individual members' shares the rate is 2.25% (§10-106.1 special nonresident/PTE rate) + 5.75% (top §10-105(a) individual rate) = 8%; on entity members' shares the statute applies the corporate rate (8.25%).

Maryland elective PTET rate on individual members is 8.75% for TY2025 (6.50% top rate + 2.25% lowest county rate)

“the tax is the top marginal state tax of 6.50% plus the lowest local income tax rate of 2.25% ... Line 7 - Individual tax Multiply the amount on line 6 by 8.75%.”

Note: The 8.25% entity-member rate is unchanged. For TY2026 the base narrows to Maryland-attributable shares only (2026 Md. Laws Ch. 6; Comptroller tax alert on TY2026 PTE estimated payments).

Maryland elective PTET rate on individual members: the §10-106.1 special rate (2.25%) plus the top marginal individual rate (5.75%), i.e. 8%; 8.25% on entity members

“a rate equal to the sum of the rate of the tax imposed under § 10-106.1 of this subtitle and the top marginal State tax rate for individuals under § 10-105(a)”

Note: SALT-cap workaround: on individual members' shares the rate is 2.25% (§10-106.1 special nonresident/PTE rate) + 5.75% (top §10-105(a) individual rate) = 8%; on entity members' shares the statute applies the corporate rate (8.25%).

Maryland PTET owner recovery: each member claims a credit for the member's proportionate share of the tax the entity paid (a full proportionate credit)

“Per Tax-General Article §10-102.1(e), each member may claim a credit against the tax imposed on the member for the member's proportionate share of the tax paid by the pass-through entity.”