Maryland State Tax Deductions

Maryland offers taxpayers several ways to reduce their state taxable income through standard deductions, itemized deductions, income subtractions, and personal exemptions.

Choosing the right combination can significantly lower the amount of state tax you owe—or increase your refund. Understanding these options is especially important when preparing your Maryland income tax return.

Maryland Standard Deduction

Maryland taxpayers may choose the standard deduction if it provides a greater benefit than itemizing. For the tax year, the standard deduction amounts are flat rates, meaning they no longer vary based on adjusted gross income (AGI).

Standard Deduction Amounts:

• Single or Married Filing Separately: $3,350
• Married Filing Jointly, Head of Household, or Qualifying Surviving Spouse: $6,700

The simplicity of the standard deduction makes it a popular choice for many taxpayers, particularly those without significant deductible expenses.

Itemized Deductions in Maryland

Taxpayers who have higher qualifying expenses may benefit from itemizing deductions instead of taking the standard deduction.

Maryland generally follows federal itemized deduction rules, but there are notable differences that filers should be aware of.

Common itemized deductions allowed for Maryland include:

• Medical and dental expenses that exceed 7.5% of federal AGI
• Home mortgage interest
• Charitable contributions made to qualified organizations
• State and local taxes (SALT), such as real estate and personal property taxes

Important limitation: Maryland does not allow a deduction for state income taxes paid, even though these may be deductible on a federal return.

High-Income Limitation: The total allowable itemized deductions are reduced by 7.5% of the amount of federal AGI exceeding $300,000 ($200,000 for married filing separately). This limitation primarily affects higher-income taxpayers.

Key Maryland Subtractions and Personal Exemptions

Beyond standard or itemized deductions, Maryland allows several state tax deductions and exemptions that further reduce taxable income:

• Personal Exemptions: Generally $3,200 per exemption claimed on the federal return, subject to income-based phaseouts
• Two-Income Married Couple Subtraction: Up to $1,200, or the lower-earning spouse’s income if less
• Child and Dependent Care Subtraction: Actual expenses up to federal limits ($3,000 for one child, $6,000 for two or more)
• Maryland 529 Plan Contributions: Up to $2,500 per beneficiary or account annually
• Age or Blindness Exemption: Additional $1,000 for taxpayers or spouses age 65 or older, or blind
• Student Loan Interest: Reflected through Maryland AGI if deductible federally
• Traditional IRA Contributions: May reduce taxable income if eligible

Why Electronic Filing Is the Best Choice

Given the number of deductions, subtractions, and income limits involved, electronic filing (e-file) is recommended. E-filing software automatically:

• Calculates deductions and phase-outs accurately
• Applies Maryland-specific tax rules correctly
• Reduces math errors and missing information
• Speeds up refunds and confirmation of receipt
• Helps ensure you claim every deduction and subtraction you qualify for

Whether you take the standard deduction or itemize, filing electronically is the safest and most efficient way to submit your Maryland tax return and maximize your tax benefits.