Maryland Taxes: State and County Income Tax Explained

Maryland taxes are built on a graduated state income tax that runs from 2% up to 5.75% for most filers, with two newer brackets at the top that apply only to high earners. For a single filer in 2025, the schedule works like this: 2% on the first $1,000 of Maryland taxable income, 3% on the next $1,000, 4% on the next $1,000, then 4.75% on income from $3,000 to $100,000, 5% from $100,000 to $125,000, 5.25% from $125,000 to $150,000, 5.5% from $150,000 to $250,000, and 5.75% above $250,000. The Comptroller of Maryland publishes this schedule in full, and it’s the place to start before you guess your rate.

Married couples filing jointly get wider brackets at the top of the schedule. The 5% rate doesn’t begin until $150,000 of joint taxable income, and the 5.75% top rate waits until $300,000. So a married couple earning the same total as two single people will usually owe a bit less Maryland state tax than the two singles combined, because the joint brackets stretch further before the higher rates engage. This is one of the rare places where filing jointly in Maryland clearly helps rather than just simplifies the paperwork.

The big 2025 change is at the very top. The Maryland General Assembly added a 6.25% bracket on income over $500,000 (single) or $600,000 (joint), and a 6.5% bracket on income over $1,000,000 for all filers. These came out of the 2025 budget law. If you’ve read an older guide that says Maryland tops out at 5.75%, that guide is now out of date for anyone earning into the six and seven figures. The Comptroller’s 2025 tax alert documents the new brackets in detail, and it’s the authoritative reference if a tax-prep product hasn’t updated its tables yet.

What people forget is that these are only the state rates. Maryland taxes also include a county income tax stacked on top, ranging from 2.25% to 3.30% depending on where you live. So your real marginal rate is the state rate plus your county rate. A Montgomery County resident in the 5% state band actually faces 5% + 3.20% = 8.20% on the next dollar earned. That combined number, not the headline state rate, is what should drive any planning decision. When somebody tells you “Maryland’s top rate is 5.75%,” they’re describing only half the bill. For a high earner in a 3.20% county, the combined top marginal rate on ordinary income can reach roughly 8.95% once the new state brackets and the county tax are stacked.

Here’s a worked figure. A single Baltimore City filer with $90,000 of Maryland taxable income pays state tax of $90 plus 4.75% of the amount over $3,000, which is $4,132.50, for $4,222.50 in state tax. Baltimore City’s local rate is 3.20%, so the county tax is $90,000 x 3.20% = $2,880. Total Maryland tax: $7,102.50, an effective combined rate of about 7.9%. That’s the kind of number that surprises people moving from a no-income-tax state like Florida or Texas, where the same $90,000 carries zero state income tax at all.

Run a second scenario to see how the brackets behave at higher income. A single filer with $300,000 of Maryland taxable income pays the graduated state tax through each band: the first $3,000 yields $90, then 4.75% to $100,000, 5% to $125,000, 5.25% to $150,000, 5.5% to $250,000, and 5.75% on the last $50,000. The state tax lands around $15,635. Add a 3.20% county tax of $9,600 and the combined Maryland bill is roughly $25,235, an effective rate near 8.4%. The same person earning $600,000 would also pick up the new 6.25% bracket on income above $500,000, pushing the marginal rate higher still.

It helps to see where Maryland sits among its neighbors. Virginia’s top state income tax rate is 5.75% with no separate county income tax, the District of Columbia runs a graduated schedule topping out near 10.75% on very high incomes, Pennsylvania uses a flat 3.07% rate, and Delaware tops out around 6.6%. Maryland’s combined state-plus-county burden lands somewhere in the middle of that group for most earners, but the county layer is what makes a direct comparison tricky. A Maryland resident in a low-rate county can pay less than a Virginian; the same resident in a 3.20% county can pay more. The headline state rate alone never tells you where Maryland really ranks, which is why the combined figure is the one to track.

One more wrinkle for 2025: the new 2% capital gains surtax. If your federal adjusted gross income tops $350,000, an extra 2% applies to your net capital gain income on top of the regular graduated rates and the county tax. So a high earner selling appreciated stock or a second property in 2025 could face the 5.75% or 6.25% ordinary rate, plus 3.20% county, plus the 2% capital gains surtax on the gain. That can push the effective tax on a large gain past 11% at the Maryland level alone, before any federal capital gains tax that flows from your Form 1040. Timing a big sale across tax years, or spreading it out, becomes a real planning question once you’re over that AGI threshold.

A common mistake is applying your top marginal rate to your entire income. Maryland is graduated, so only the income inside each band is taxed at that band’s rate. Hitting the 5.75% bracket does not mean your whole income is taxed at 5.75%, only the portion above the threshold. Confusing marginal and effective rates leads people to wildly overestimate what they owe and make poor decisions about bonuses, Roth conversions, and capital gains timing. The marginal rate is the one to use for “should I earn or defer this next dollar” questions; the effective rate is what you actually paid divided by your income. For the federal brackets that sit on top of all this, see our guide to federal tax brackets for 2025. Rates and brackets shift with nearly every legislative session, so confirm the current year on the Comptroller’s site before you file, and bring the question to a CPA if a large or unusual income event is in play.

The county income tax is the feature that sets Maryland taxes apart from most states. Every one of Maryland’s 23 counties, plus Baltimore City, charges a local income tax on top of the state rate. You don’t file anything separate for it. The Comptroller collects it right on your state return, on line 28 of Form 502, as a convenience for the local governments. One return, two layers of income tax, which is unusual. Most states with local income taxes make you file a separate municipal return; Maryland folds it into the state filing.

For 2025 the county rates range from 2.25% at the low end up to 3.30% at the high end. The 2025 budget law raised the ceiling from the long-standing 3.20% to 3.30%, giving counties room to raise rates further. A handful of jurisdictions, including Baltimore City, Baltimore County, Howard, Montgomery, Prince George’s, Queen Anne’s, and several Eastern Shore counties, have sat at or near the top. Worcester and Talbot have historically been the lowest, around 2.25% to 2.40%. The Comptroller’s local rate chart lists every county’s current rate, and a couple of counties (Anne Arundel and Frederick among them) now use tiered local rates that step up with income, so a single percentage no longer describes them cleanly.

The key rule, and the one people get wrong, is that the county tax is based on where you live, not where you work or where your tax preparer is. If you live in Howard County but commute to a job in Baltimore City, your county tax uses the Howard County rate. Your county of residence on the last day of the tax year controls. This matters enormously for people who work in Washington, D.C. or Virginia but live in Maryland, because their entire wage income picks up the Maryland county rate based on their home address. There’s no escaping the county tax by working out of state; residence is what counts.

The county tax also applies to your full Maryland taxable income, not a separate smaller base. So unlike the graduated state tax, the county piece is essentially flat for most counties: take your Maryland taxable income and multiply by your county rate. If you’re in Prince George’s County at 3.20% with $80,000 of Maryland taxable income, your county tax is simply $80,000 x 3.20% = $2,560. There’s no bracket math on the county side for the flat-rate counties, which makes it easy to estimate but also easy to underestimate, since people tend to focus on the state schedule and forget the local layer entirely.

Let’s run a fuller worked example. A married couple filing jointly in Montgomery County (3.20%) with $200,000 of Maryland taxable income. State tax under the joint schedule: $90 on the first $3,000 band, plus 4.75% from $3,000 to $150,000 ($147,000 x 4.75% = $6,982.50), plus 5% from $150,000 to $175,000 ($25,000 x 5% = $1,250), plus 5.25% from $175,000 to $200,000 ($25,000 x 5.25% = $1,312.50). State total: roughly $9,635. County tax: $200,000 x 3.20% = $6,400. Combined Maryland tax: about $16,035, an effective rate near 8%. The county piece alone is $6,400 of that, which shows how much the local layer drives the total. If that same couple lived in Talbot County at 2.40%, the county tax would be $4,800, saving $1,600 a year on identical income.

The county tax also affects how you should think about estimated payments and withholding. Maryland withholding tables build in an assumed county rate, but if you live in a high-rate county and your employer is withholding at a lower assumed rate, you can end up underwithheld and owe at filing. Self-employed Marylanders making quarterly estimates need to remember to fund both the state and county portions, because forgetting the county layer is a fast way to a balance due plus an underpayment penalty. The fix is simple once you know to look: check that your county rate matches what’s being withheld, and adjust your Maryland Form MW507 if it doesn’t. The federal withholding picture, by contrast, runs off your Form W-4, which doesn’t account for the Maryland county tax at all.

The tiered-rate counties deserve a closer look because they break the simple “multiply by one percentage” rule. Anne Arundel County, for instance, has used a graduated local schedule that charges a lower rate on the first tier of income and steps up to higher rates on income above set thresholds, and Frederick County adopted its own tiered structure as well. For residents of those counties, you can’t just multiply your taxable income by a single number; you have to apply each tier the way you would the state brackets. The Comptroller’s rate chart footnotes spell out the exact breakpoints, and tax software handles it automatically, but if you’re estimating by hand it’s an easy place to get the math wrong by hundreds of dollars.

There’s also a coordination point for people who earn in D.C. but live in Maryland. The way your out-of-state wages get taxed and credited can differ from a straightforward in-state job. Generally a Maryland resident reports all income to Maryland (including the county tax) and claims a credit for income taxes paid to other states or to D.C., so you aren’t taxed twice on the same dollars. But the mechanics vary by jurisdiction, and getting the credit wrong is a common way these returns go sideways. If you cross a state line for work, this is exactly the kind of thing worth confirming with a preparer rather than guessing.

The most expensive mistake is moving within Maryland without checking county rates. People relocate from Talbot (around 2.40%) to Montgomery (3.20%) for a job or schools and never realize they just added roughly 0.80% to their tax on every dollar of income. On $150,000 of taxable income that’s about $1,200 a year, every year. The reverse can save real money. Before any in-state move, look up both county rates and run the difference, the same way you’d compare property tax or commute time. For broader help comparing how different states structure their taxes, our state tax questions guide is a good next stop. County rates can change each year with a July 1 notice deadline, so verify the current rate for your county on the Comptroller’s site, and ask a CPA if you’re filing in more than one state or just moved.

The Maryland standard deduction changed in a big way for 2025, and the old method is worth understanding so you don’t get tripped up by outdated guides. For years, Maryland computed the standard deduction as 15% of your Maryland adjusted gross income, subject to a minimum floor and a maximum cap that varied by filing status. It was an oddball formula that meant your deduction grew with income until it hit the ceiling, and almost nobody could state their own deduction off the top of their head. The 2025 legislative session scrapped that entirely.

For tax year 2025, Maryland taxes use a flat standard deduction: $3,350 for single, married-filing-separately, and dependent filers, and $6,700 for married filing jointly, head of household, and qualifying surviving spouse. The same amount applies regardless of how much you earn. No more 15% calculation, no more caps. If you’ve seen references to “15% of Maryland AGI” or specific minimum and maximum amounts, those describe the pre-2025 system and no longer apply. The Comptroller’s 2025 tax alert lays out the new flat amounts, and it’s worth confirming there if your software still shows the old formula.

You report all of this on Form 502, the Maryland resident income tax return. The form starts with your federal adjusted gross income, which means your federal return has to be substantially complete before you can finish your Maryland return. From your federal AGI, you make Maryland-specific additions (some items the state taxes that the feds don’t) and subtractions (like the pension exclusion or Social Security, which Maryland doesn’t tax), then subtract your standard or itemized deduction, then apply the state rate schedule and your county rate.

Maryland lets you itemize on the state return even if you took the standard deduction on your federal return, and vice versa, so you should run it both ways. Because the new flat standard deduction is modest, more Maryland filers with mortgage interest, large state taxes paid, or significant charitable giving may come out ahead itemizing on Form 502. High earners face a phase-out of itemized deductions, so the comparison isn’t automatic. Run both numbers, and remember that the Maryland itemized deduction starts from your federal Schedule A total with some Maryland adjustments, so the two don’t always match.

A worked example shows why the deduction matters. A single filer in Anne Arundel County with $70,000 of Maryland AGI and no Maryland additions takes the $3,350 standard deduction, leaving $66,650 of Maryland taxable income. State tax: $90 plus 4.75% of $63,650 = $90 + $3,023.38 = roughly $3,113. County tax at Anne Arundel’s rate (around 2.81% on most income) adds about $1,873. Total Maryland tax: roughly $4,986. If that same filer had $9,000 in itemizable deductions instead of the $3,350 standard, taxable income drops to $61,000, saving 4.75% state plus the county rate on the $5,650 difference, around $425 in total tax. That $425 is why running both methods is worth the ten minutes.

Filing logistics matter too. Maryland’s deadline tracks the federal April 15 date, and the state automatically honors a valid federal extension for filing, though as always an extension to file is not an extension to pay. You can file Form 502 electronically through most tax software or through the Comptroller’s free iFile system, and e-filing with direct deposit is the fastest route to a refund. If you owe, you can pay online, by check, or set up a payment plan, but interest and penalties accrue on anything not paid by the original deadline.

It’s worth understanding the additions and subtractions that sit between federal AGI and Maryland taxable income, because they’re where Maryland quietly departs from the federal number. On the addition side, Maryland makes you add back things like interest on out-of-state municipal bonds and certain federal deductions the state doesn’t follow. On the subtraction side, Maryland lets you back out income it chooses not to tax: Social Security, the pension exclusion for those 65 and older, up to a set amount of military retirement income, certain child and dependent care expenses, and contributions to the Maryland 529 college savings plan, among others. These adjustments can move your Maryland taxable income meaningfully away from your federal AGI, in both directions, so two people with identical federal returns can owe very different Maryland tax.

The 529 plan subtraction is one of the more useful and underused ones. Maryland lets account holders subtract a limited amount of contributions per beneficiary each year from Maryland income, which at the combined state-plus-county rate is real money back on a contribution you were likely making anyway. A family in a 3.20% county contributing the maximum subtractable amount per child can save a few hundred dollars of Maryland tax per beneficiary, every year, just for routing college savings through the Maryland plan rather than an out-of-state one. It won’t show up on your federal return at all, which is exactly why people miss it. Check the current contribution limits in the Form 502 instructions before relying on a specific figure.

One detail that trips up filers who recently moved to Maryland: the part-year resident return. If you became a Maryland resident partway through 2025, you file Form 502 but prorate, reporting all income earned while a Maryland resident and only Maryland-source income earned before you moved in. The standard deduction and exemptions get prorated too, based on the portion of the year you lived in the state. Mixing up the full-year and part-year math is a frequent error, and it usually shows up as either an overstated deduction or a balance due the filer didn’t expect. The current Form 502 and 505 instructions from the Comptroller walk through the proration, and the federal starting point still comes from your Form 1040.

The common mistake is finishing the Maryland return before the federal return is locked down. Since Form 502 pulls federal AGI as its starting number, any change to the federal return (an amended W-2, a late 1099, a corrected K-1) ripples straight into Maryland, and you’ll have to amend the state return too. Always finish federal first, then build Maryland on top of it. Our guide on how Form 1040 tax returns work walks through producing that AGI figure. Form instructions and deduction rules change yearly, so check the current Form 502 instructions on the Comptroller’s site, and bring anything complicated, like a multi-state move or a business return, to a CPA.

Maryland is more generous to retirees than its working-age rates suggest, and the rules around retirement income are some of the most misunderstood parts of Maryland taxes. The headline: Maryland does not tax Social Security benefits at all. Retirement, disability, survivor, and Railroad Retirement benefits are all subtracted from your Maryland return. Even when a portion of your Social Security is taxable on your federal return, Maryland backs it right out, so none of it gets hit by the state or county rate. That single rule makes a meaningful difference for retirees comparing Maryland to states that do tax benefits.

Beyond Social Security, Maryland offers a pension exclusion for residents who are 65 or older or who are totally disabled (or whose spouse is totally disabled). For 2025 the maximum exclusion is $41,200. This shields a chunk of qualified retirement income from Maryland tax. The catch is in the definition of “qualified.” The exclusion covers income from employer-sponsored plans like pensions, 401(k)s, and 403(b)s, but it does not cover IRA distributions. That distinction surprises a lot of retirees who rolled an old 401(k) into an IRA and then found the rollover money no longer qualifies for the exclusion. The move that looked smart at retirement quietly cost them a Maryland tax break.

There’s a second catch. The pension exclusion is reduced dollar-for-dollar by any Social Security benefits you receive. So if you collect $25,000 in Social Security and have $50,000 of qualifying pension income, your exclusion drops from the $41,200 maximum to $16,200 ($41,200 minus $25,000). Many retirees assume they get both the full Social Security exemption and the full pension exclusion stacked on top of each other. They don’t. The Social Security offset is the price of the exclusion. The Comptroller’s pension exclusion page has the worksheet that runs this offset, and it’s worth filling out before you assume how much of your pension will be sheltered.

Maryland also has a separate retirement income tax credit for some residents 65 and older, layered on top of the exclusion, which can further reduce the bill for moderate-income retirees. Between the Social Security exemption, the pension exclusion, and that credit, a typical Maryland retiree living mostly on Social Security and a modest pension can owe very little state income tax, even though a working professional at the same headline income level would owe the full graduated rate plus county tax. The state’s reputation as high-tax is really a story about working-age earners, not retirees.

Here’s a worked example. A 67-year-old single retiree receives $24,000 in Social Security and $36,000 from a former employer’s pension. The Social Security is fully subtracted, so it isn’t taxed by Maryland. The pension exclusion starts at $41,200 but is reduced by the $24,000 of Social Security, leaving a $17,200 exclusion. Of the $36,000 pension, $17,200 is excluded and $18,800 remains taxable in Maryland (before the standard deduction and any retirement credit). Apply the $3,350 standard deduction and the taxable figure drops to about $15,450, and at the 2%-to-4.75% bands plus a modest county rate, the total Maryland tax is only a few hundred dollars. Contrast that with the federal treatment, where more of the Social Security and all of the pension may be taxable.

Now flip the example to show the IRA trap. Suppose that same retiree’s $36,000 came from IRA withdrawals instead of an employer pension. The IRA money does not qualify for the pension exclusion at all, so the full $36,000 is potentially taxable in Maryland (minus the standard deduction), and the only shelter left is the standard deduction and the retirement credit if eligible. Same income, very different Maryland tax, purely because of which account the money came out of. This is why the source of retirement income, not just the amount, drives the Maryland result.

Military retirees get an additional break worth knowing about. Maryland allows a subtraction for a set amount of military retirement income, and that allowance has been expanded in recent years, with larger subtractions for retirees who meet age requirements. This is separate from the regular pension exclusion, so a military retiree may benefit from the military subtraction even if the Social Security offset has eaten into the general pension exclusion. For a retired service member living in Maryland on a military pension plus Social Security, the combination of the military retirement subtraction and the Social Security exemption can leave very little of their retirement income exposed to Maryland tax. The exact subtraction amounts change with legislation, so confirm the current figure in the Form 502 instructions.

There’s also a strategic angle on Roth conversions for Maryland retirees. A Roth conversion is taxable in the year you convert, and because converted IRA money is generally not covered by the pension exclusion, a large conversion can land in Maryland’s higher brackets plus the county tax all at once. But done in smaller annual slices during lower-income years, especially early in retirement before Social Security and required minimum distributions ramp up, a conversion can move money out of accounts that would otherwise produce unsheltered IRA income later. The Maryland angle, that IRA distributions don’t get the exclusion but Roth distributions are tax-free, is a reason some Maryland retirees lean harder into conversions than they would in a state with broader retirement-income breaks. It’s account-specific and worth modeling with a CPA before you convert.

The federal side interacts with all of this, so it helps to know where the numbers come from. How much of your Social Security is taxable at the federal level is figured on your Form 1040 using the IRS worksheet, and that federal taxability has no bearing on Maryland, which exempts the benefits entirely. Required minimum distributions from IRAs and employer plans, governed by the IRS RMD rules, are taxable federally and, for IRAs, generally taxable in Maryland too since they don’t qualify for the pension exclusion. The takeaway: a dollar of retirement income can be taxed federally, exempt in Maryland, or both, depending entirely on the account it came from, which is why coordinating the two returns matters.

The most common mistake is assuming an IRA distribution qualifies for the pension exclusion. It doesn’t, and retirees who count on it can be caught short at filing. If most of your retirement savings sits in IRAs, the exclusion may do little for you, which is a planning point worth raising before you start drawing down accounts, not after. For broader planning around investment and retirement income, our tax strategy guides are a useful companion. Retirement tax rules and exclusion amounts change yearly, so verify the current figures on the Comptroller’s site and talk to a CPA about the order in which you draw from different accounts, since the sequencing can change your Maryland bill by thousands over a retirement.

Whether you must file a Maryland return comes down to residency and income. If you’re a Maryland resident and you’re required to file a federal return, you generally have to file Maryland taxes too, using Form 502. Maryland sets gross-income filing thresholds that roughly track the federal standard deduction amounts and vary by age and filing status, so a single filer under 65 generally must file once gross income crosses the federal filing threshold. Even below the threshold, you’ll want to file if Maryland tax was withheld from your pay, because that’s the only way to get the refund back. Filing when you don’t strictly have to is also how lower-income residents claim refundable credits like the Maryland earned income credit.

Nonresidents who earn Maryland-source income, such as wages from a Maryland job or rent from Maryland property, file Form 505 instead of Form 502. Part-year residents, people who moved into or out of Maryland during the year, also use Form 505 and prorate their income between the part of the year they were residents and the part they weren’t. One quirk worth flagging: nonresidents who owe Maryland tax pay a special nonresident rate in place of the county tax, since they don’t live in any Maryland county. The Comptroller’s rate page lists that nonresident figure, around 2.25%, alongside the county rates.

Sales tax in Maryland is refreshingly simple. The rate is a flat 6% statewide with no county or city add-ons, so the rate is identical everywhere in the state. The main exceptions: alcoholic beverages carry a 9% rate, and the 2025 legislation extended the sales tax to certain digital products and a set of services that weren’t taxed before, including some technology and data services taxed at a new lower rate. Groceries for home consumption and prescription drugs remain exempt. The Comptroller’s sales and use tax section spells out what’s taxable and what’s exempt, which matters a great deal for business owners who suddenly have to register and collect on newly taxed services they used to sell tax-free.

Property tax is entirely local and separate from the income tax. The State Department of Assessments and Taxation values your real property, and then your county and municipality apply their own rates plus a small statewide property tax. Effective rates across Maryland generally land around 1% of assessed value, but they vary by jurisdiction, and reassessments happen on a rolling three-year cycle, so your assessed value can jump after a reassessment year. Property tax isn’t reported on your income tax return, though Maryland’s Homeowners’ Property Tax Credit and the Homestead Tax Credit can reduce what you owe if you qualify, the Homestead credit by capping how fast your taxable assessment can rise on your principal residence. Our overview of what property tax is covers the assessment mechanics in plain terms.

A worked example ties the filing question together. Suppose you live in Virginia but own a rental in Baltimore County that nets $18,000 of Maryland-source income. You’re a nonresident, so you file Form 505, report the $18,000, and pay Maryland tax at the graduated rates plus the special nonresident rate that stands in for the county tax, roughly 2.25%. On $18,000 that’s a few hundred dollars of state tax plus about $405 of nonresident local tax. You then claim a credit for those Maryland taxes on your Virginia resident return so you’re not taxed twice on the same income. Get the order wrong, or skip the Maryland filing entirely because “I don’t live there,” and you risk a notice from the Comptroller plus penalties and interest, and you may also lose the out-of-state credit on your home-state return.

Business owners face their own filing layer. A Maryland LLC, S corporation, or partnership may owe the Maryland pass-through entity tax and file its own return, and Maryland’s elective pass-through entity tax can let owners work around the federal SALT cap, a planning move worth discussing with a CPA. Sole proprietors report business income right on Form 502 through the federal Schedule C flow-through, so their Maryland filing is part of the personal return.

The 2025 sales tax expansion deserves more attention than it’s getting, especially from small business owners. For years Maryland taxed goods but left most services alone. The 2025 legislation changed that for a defined set of services, applying tax to certain digital and technology-related services that previously escaped it. If you run a business that sells one of those newly covered services, you now have to register with the Comptroller, charge the tax, collect it from customers, and remit it on a regular filing schedule. Miss the registration and you can be on the hook for the uncollected tax out of your own pocket, plus penalties. Any Maryland business that sells digital products or tech services should read the current sales and use tax guidance carefully rather than assume last year’s rules still apply.

For property owners, the appeal process is one of the few levers you actually control. When the State Department of Assessments and Taxation reassesses your property and the new value looks too high, you have a limited window, generally 45 days from the notice, to appeal the assessment. A successful appeal lowers your assessed value and therefore your property tax bill for the assessment cycle, not just one year. Many homeowners never appeal because they assume the assessment is final or don’t realize the deadline is short. If your reassessment came in well above recent comparable sales in your neighborhood, an appeal backed by those comparables is worth the effort, and it’s entirely separate from your income tax filing.

The frequent mistake is the nonresident who assumes Maryland-source income doesn’t trigger a filing. It does. Rental income, a partnership interest, wages from a Maryland employer, all of it can require Form 505 even if you’ve never set foot in the state to live. If you’re filing across state lines, our state tax questions guide covers the multi-state basics, including how the credit for taxes paid to another state works. Filing thresholds and rates change yearly, so check the current Form 502 and 505 instructions on the Comptroller’s site, and a CPA is worth the call any time you have income in more than one state or run a business.