- the standard deduction, held at an earlier amount because no 2026 indexed figure has been confirmed in a primary source.
- the pension-exclusion amount quoted in the notes (the exclusion itself is not modeled).
- Income tax
- 2%–6.5%
- Social Security
- Exempt
- Retirement exclusion
- None modeled
- Standard deduction
- $5,450 joint · $2,725 single
- Personal exemption
- $6,400 joint · $3,200 single
- Capital gains
- Taxed as ordinary income
How Maryland taxes retirement income
Maryland taxes income in 10 brackets for a married couple filing jointly, from 2% to 6.5%; the top rate starts at $1,200,000 of taxable income[1]. For the example couple below, the last dollar of taxable income falls in the 4.75% bracket.
Before the rate applies, the simulator subtracts a standard deduction of $5,450 on a joint return ($2,725 single) and personal exemptions of $6,400 ($3,200 single).
Social Security benefits are exempt from Maryland income tax: none of the benefit enters the state base, as in 22 of the 24 states covered here that tax income.
The simulator applies no retirement-income exclusion in Maryland: IRA and 401(k) withdrawals and pensions are taxed like other income. Any narrower break in state law that the simulator does not apply is listed under “What this page leaves out”.
Long-term capital gains and qualified dividends are taxed as ordinary income, at the same rates.
Single filers use their own, narrower rate schedule, shown in the second table below.
Put together, the example couple below owes $2,235 in Maryland, the 20th lowest of the 24 states covered here that tax income.
2026 brackets
| Taxable income over | Up to | Rate |
|---|---|---|
| $0 | $1,000 | 2% |
| $1,000 | $2,000 | 3% |
| $2,000 | $3,000 | 4% |
| $3,000 | $150,000 | 4.75% |
| $150,000 | $175,000 | 5% |
| $175,000 | $225,000 | 5.25% |
| $225,000 | $300,000 | 5.5% |
| $300,000 | $600,000 | 5.75% |
| $600,000 | $1,200,000 | 6.25% |
| $1,200,000 | and over | 6.5% |
| Taxable income over | Up to | Rate |
|---|---|---|
| $0 | $1,000 | 2% |
| $1,000 | $2,000 | 3% |
| $2,000 | $3,000 | 4% |
| $3,000 | $100,000 | 4.75% |
| $100,000 | $125,000 | 5% |
| $125,000 | $150,000 | 5.25% |
| $150,000 | $250,000 | 5.5% |
| $250,000 | $500,000 | 5.75% |
| $500,000 | $1,000,000 | 6.25% |
| $1,000,000 | and over | 6.5% |
Bracket thresholds are held at these values in every simulated year. The simulator does not index state amounts for inflation.
Worked example
A retired couple, both 67, filing jointly, with $48,000 of Social Security, $40,000 of IRA withdrawals and a $20,000 pension. The figures are computed when the page is built, by the same state-tax function the simulator runs.
| IRA / 401(k) withdrawals + pension | $60,000 |
|---|---|
| Social Security in the state base ($48,000 received, $40,000 federally taxable) | $0 |
| Less retirement exclusion | −$0 |
| Less standard deduction | −$5,450 |
| Less personal exemptions | −$6,400 |
| Taxable in Maryland | $48,150 |
| Maryland income tax | $2,235 |
| Share of $108,000 gross income | 2.07% |
The couple’s next $1,000 of IRA withdrawals would add $48 of Maryland tax.
A single retiree, 67, with half those amounts ($24,000 of Social Security, $20,000 of IRA withdrawals, a $10,000 pension) owes $1,091, 2.02% of gross income, against the couple’s 2.07%.
| IRA / 401(k) withdrawals + pension | $30,000 |
|---|---|
| Social Security in the state base ($24,000 received, $11,300 federally taxable) | $0 |
| Less retirement exclusion | −$0 |
| Less standard deduction | −$2,725 |
| Less personal exemptions | −$3,200 |
| Taxable in Maryland | $24,075 |
| Maryland income tax | $1,091 |
| Share of $54,000 gross income | 2.02% |
As IRA withdrawals rise
The same couple, with Social Security and the pension unchanged, taking more from their IRAs (a larger withdrawal, a required minimum distribution or a Roth conversion all count as distributions here):
| IRA withdrawals | Maryland tax | Share of gross income | Next $1,000 adds |
|---|---|---|---|
| $0 | $335 | 0.49% | $48 |
| $20,000 | $1,285 | 1.46% | $48 |
| $40,000 | $2,235 | 2.07% | $48 |
| $80,000 | $4,135 | 2.79% | $48 |
| $120,000 | $6,035 | 3.21% | $48 |
| $200,000 | $10,063 | 3.75% | $53 |
Neighbouring states
The example couple’s state tax in Maryland and in the neighbouring states covered here, same income and ages:
| State | Income tax | Social Security | Couple’s tax | Difference |
|---|---|---|---|---|
| Maryland | 2%–6.5% | Exempt | $2,235 | n/a |
| Pennsylvania | Flat 3.07% | Exempt | $0 | −$2,235 |
| Virginia | 2%–5.75% | Exempt | $2,079 | −$155 |
Against Maryland, the couple would pay less in Pennsylvania (−$2,235), Virginia (−$156). With $200,000 of IRA withdrawals instead of $40,000, they would owe $10,063 in Maryland, against Pennsylvania ($0), Virginia ($11,279).
What this page leaves out
What the simulator does and does not handle for Maryland, item by item[1]:
- Tax year 2026 married filing jointly state schedule (2%–6.5%; the 2025 act added 6.25% over $600,000 and 6.5% over $1.2M).
- Single/married filing separately use Rate Schedule I (a separate schedule in the simulator), head of household uses the joint schedule.
- COUNTY income tax (2.25%–3.3%) NOT modeled, which materially understates MD tax.
- The 2% surtax on net capital gains for federal AGI over $350,000 (tax years 2025 and later) is NOT modeled.
- Standard deduction HELD at $5,450 married filing jointly: the statutory tax year 2025 amount is $6,700 married filing jointly / $3,350 single, indexed from tax year 2026, and no tax year 2026 figure was found in a primary source, so tax is overstated slightly.
- $3,200/person exemption (phase-out ignored).
- Social Security exempt.
- The pension exclusion ($41,200/person at 65+ for tax year 2025; the 2026 figure was not confirmed) is NOT modeled: IRAs are ineligible and it is reduced dollar-for-dollar by Social Security benefits received.
In every state the simulator also leaves out credits, itemized deductions, deductions that phase out with income, local income taxes, surtaxes and any deduction for federal tax paid. It holds state amounts fixed and does not index them for inflation.
See it over a full plan
If you already have a saved plan, the link only takes you to the Household panel, where the state is set; your plan is not changed.
Related
This page shows how the rules work. It is not financial, tax or investment advice. State law has details these pages leave out, so check the state’s own instructions or ask a tax professional before you act. See the disclaimer.
Sources
- Maryland figures: the source we used for Maryland (marylandcomptroller.gov) ↩
- IRS Publication 915: the federal worksheet for the taxable part of Social Security
Verified . The full verification record for this entry is in the sources ledger, with every other figure the simulator uses on the sources page.