Maryland tax deductions and write-offs (2026)

Yes: redeemable ground rent, common in Baltimore and parts of Pennsylvania, is deductible as mortgage interest if you itemize.

Yes on your federal return if you itemize, within the $40,400 SALT cap. Maryland adds its own break: Homeowners' Property Tax Credit for any age with household income up to $60,000; Renters' Tax Credit pays up to $1,000.

Yes: Maryland offers the Renters' Tax Credit. Direct check of up to $1,000 a year for qualifying renters, applied for through the State Department of Assessments and Taxation (SDAT), not on the income tax return. Age 60+ or 100% disabled, or under 60 with a dependent child under 18 and no housing subsidy; income-based eligibility; combined net worth under $200,000; lived in the Maryland rental at least six months of the prior year.

Partly. Maryland lets retirees subtract the first $12,500 of military retirement income if under age 55, or the first $20,000 at age 55 or older (amounts in effect since tax year 2023). Retirees 65 and older, or disabled, may also use Maryland's general pension exclusion on military pay above the cap. Two 2026 bills to raise the subtraction (HB 761 and HB 857) did not pass. Maryland defines military retirement income to include death benefits. Other retirement income: Taxpayers 65+ (or totally disabled) may exclude up to $40,600 (2026) of employer-plan income from pensions, 401(k), 403(b), and 457(b) plans, reduced by Social Security/RRB received. IRA, Roth, SEP, and Keogh distributions do not qualify.

Partly. Taxpayers 65+ (or totally disabled) may exclude up to $40,600 (2026) of employer-plan income from pensions, 401(k), 403(b), and 457(b) plans, reduced by Social Security/RRB received. IRA, Roth, SEP, and Keogh distributions do not qualify. The Comptroller lists $40,600 for 2026, slightly below the 2025 figure of $41,200; worth rechecking against final 2026 forms.

No. Maryland does not tax Social Security or Railroad Retirement benefits; the federally taxable amount is subtracted on Form 502. Social Security received reduces Maryland's separate pension exclusion for people 65 and older.

Yes: Maryland offers the Maryland Earned Income Tax Credit, With qualifying children: 50% of the federal EITC nonrefundable, or a 45% refundable credit if better. Without qualifying children: 100% of the federal EITC, refundable (refundable). ITIN filers and workers without children aged 18–24 eligible. Counties also offer a local EITC. A 2026 bill (SB 377) to raise the income limit for workers without children did not pass.

Only instead of income tax: itemizers in Maryland pick sales tax (6% state rate, about 6% with local taxes) or state income tax, whichever is bigger. Instead of sales tax, vehicles pay a titling excise tax of 6.5% of the total purchase price (raised from 6% on July 1, 2025).

No: Maryland doesn't base registration on your car's value, so it isn't deductible as personal property tax. Passenger cars pay $120.50-$191.50 per year by weight class, including the EMS surcharge; titling excise is one-time.

Maryland added 6.25% and 6.5% brackets for high earners in 2025, counties add income tax of up to 3.3%, and high earners pay an extra 2% on capital gains.

Yes on your Maryland return: $2,500 per beneficiary per contributor ($5,000 joint if each spouse contributes). Only contributions to the state's own plan count. Account holders and other contributors qualify; nonqualified withdrawals added back. 2025 bill to raise cap to $4,850 did not pass.

Yes: $500 per child under 6, or under 17 with a disability, if federal AGI is $15,000 or less. Reduced by $50 per $1,000 above $15,000, so it's gone above $24,000 AGI. Refundable.

Yes, as a business expense: Maryland charges $100 to form an LLC; ongoing: $300 annual report (Form 1). Due April 15 (extension available to June 15).