Maryland Standard Deduction

Maryland uses a flat standard deduction that depends solely on your filing status.

This marks a significant shift from prior years, when the deduction was calculated as a percentage of income subject to minimum and maximum limits.

Under the new rules, eligible taxpayers within the same filing status receive the same standard deduction amount, regardless of income level.

Maryland Standard Deduction Amounts

The standard deduction directly reduces your Maryland taxable income and can simplify filing for taxpayers who do not benefit from itemizing deductions.

Key Changes Affecting Maryland Taxpayers

Flat Standard Deduction Structure

Beginning in tax year 2025, Maryland moved to a fixed-dollar standard deduction by filing status. This replaces the prior system that calculated the deduction as a percentage of adjusted gross income (AGI), subject to caps.

What this means for taxpayers:

• Greater predictability when estimating tax liability
• Easier tax planning throughout the year
• Simplified return preparation, especially for moderate-income filers

Itemized Deduction Limitation for Higher-Income Taxpayers

Taxpayers who choose to itemize deductions and have higher incomes may face a limitation:

• If your federal AGI exceeds $200,000, or
• $100,000 if married filing separately,

Your Maryland itemized deductions will be reduced by 7.5% of the amount your AGI exceeds those thresholds.

This limitation does not affect taxpayers who claim the standard deduction, making the standard deduction especially attractive for some higher-income filers.

Future Cost-of-Living Adjustments

Starting with tax year 2025, future increases to the Maryland standard deduction will be indexed to cost-of-living adjustments (COLAs). This means the deduction amounts are expected to rise gradually over time to help offset inflation.

Choosing Between Standard and Itemized Deductions

Most taxpayers will benefit from taking the standard deduction, especially under the new flat-rate structure. However, itemizing may still make sense if you have significant deductible expenses, such as:

• Large charitable contributions
• Substantial mortgage interest
• High medical expenses

Tax software can easily compare both options to determine which provides the greatest tax benefit.

Why Electronic Filing Is Recommended

Electronic filing (e-filing) is highly recommended for Maryland taxpayers, particularly with the new deduction rules in place.

E-filing:

• Automatically applies the correct standard deduction by filing status
• Calculates itemized deduction limitations for higher-income taxpayers
• Reduces math and data-entry errors
• Helps ensure you choose the most beneficial deduction option
• Speeds up processing and refunds
• Confirms receipt by the Maryland Comptroller’s Office

Most tax software is fully updated to reflect Maryland’s tax law changes and will guide you step by step through the filing process.

Bottom Line

For the 2025 tax year, Maryland’s flat standard deduction simplifies state tax filing and provides greater certainty for taxpayers.

Understanding the new structure—and using electronic filing—can help ensure accuracy, maximize allowable deductions, and make filing your Maryland return faster and easier.