It’s true that Maryland assesses a state income tax on its residents. In general, people living here also pay a county or Baltimore City income tax when filing the annual return. For employees in Maryland, paycheck withholding relies on the income item & filing status and the county details listed on the Form MW507.
The system applies to the wages & self-employment earnings, retirement distributions, and other taxable money. The rates increase in parallel to the taxable income rise. The state also collects local income taxes for individual counties & Baltimore City during the regular filing process.
Taxpayers generally pay a combined state & local rate. According to the Maryland Comptroller, state rates vary between 2.00% and 6.50%. Local income tax rates change by county. Their range is from 2.25% to 3.30%. Furthermore, specific counties apply their own bracket systems.
Legislative updates in 2025 maintained the progressive structure. Moreover, upper brackets — 6.25% and 6.50% — were added for high-income earners. County rates also have the potential to shift from year to year.
Yes. All 23 Maryland counties, as well as Baltimore City, charge a local income tax. Taxpayers pay this alongside the individual state return
Distinct counties impact:
Moving to a new address during the year means updating the withholding setup with your employer.
The documentation varies with the residency status and the source of earnings.
Check paycheck withholding well before taxation season.
These numbers are particularly important after moving, taking a second job, getting married or receiving a major bonus.
With more than 30 years of experience, Watter CPA reviews your filing status and county tax exposure as well as withholding to establish full compliance.
