Unique mechanism
Why is Maryland's system different from every other state?
In most states with local income taxes, the tax is based on where you work (Ohio, Pennsylvania, Missouri) or is administered separately by the locality (NYC, Philadelphia, Detroit). Maryland does it completely differently:
- Every jurisdiction has a local tax. All 23 counties plus Baltimore City levy a local income tax. There is no Maryland jurisdiction without one.
- It is based on where you live. Your county of residence on December 31 determines your rate. Where you work is irrelevant for the local tax.
- It is collected through the state return. The Maryland Comptroller calculates your county tax automatically. You never file a separate county return.
This means there is no work-city vs. home-city credit issue like in Ohio or Pennsylvania. You simply pay your home county's rate on all taxable income, and it is handled seamlessly on your state return.
What is the difference between Baltimore City and Baltimore County?
Baltimore City is an independent city — it is not part of any county. Baltimore County surrounds Baltimore City geographically but is a separate jurisdiction. They may have different local income tax rates. If you live within Baltimore City limits, you pay the Baltimore City rate. If you live in Baltimore County (Towson, Dundalk, Pikesville, etc.), you pay the Baltimore County rate. The boundary determines your rate.
This distinction catches newcomers off guard. The mailing address "Baltimore, MD" does not always mean Baltimore City — some Baltimore County addresses use "Baltimore" in the postal address. Check your county designation, not just your mailing city, to determine which rate applies.
How do the rates compare across Maryland counties?
Maryland county rates range from 2.25% to 3.20%. The exact rate for each county is set annually by the county government within the range allowed by state law (minimum 1.0%, maximum 3.20%). Most counties cluster in the 2.8% to 3.2% range. For the current rate table showing all 24 jurisdictions, check the Maryland Comptroller's website.
What about out-of-state residents working in Maryland?
Maryland charges nonresidents who earn Maryland-source income a special nonresident local income tax rate instead of a county rate. This rate is set by the state and applies uniformly regardless of where in Maryland the nonresident works. It functions as a substitute for the county piggyback tax and is calculated on the nonresident Maryland return (Form 505).
If you live in Virginia, DC, Pennsylvania or another state and commute to a Maryland employer, this nonresident local tax applies to your Maryland-source wages. Your home state may give you a credit for Maryland taxes paid, depending on reciprocal agreements. Maryland has reciprocal agreements with DC, Pennsylvania, Virginia and West Virginia for state income tax, but the local tax component has its own treatment.
How does Maryland local tax stack with state tax?
Maryland's state income tax uses graduated brackets from 2% to 5.75%. The county tax is on top of that. A Maryland resident in a 3.2% county could face a combined state-plus-local rate of nearly 9% on high income, plus federal tax and FICA. This makes Maryland one of the higher-taxed states in the mid-Atlantic region when local taxes are included.
What is the combined tax burden for a Baltimore-area worker?
Worked example: $85,000 salary, single filer, Baltimore County resident
| Tax layer | Approximate amount |
|---|---|
| Federal income tax | ~$11,400 |
| FICA (employee share) | ~$6,500 |
| Maryland state income tax | ~$3,800 |
| County income tax (rate varies) | ~$2,500 (at ~3%) |
| Estimated take-home | ~$60,800 |
Illustrative example using approximate rates. The county rate depends on your specific jurisdiction. Use our Maryland take-home calculator for a personalized estimate.
The combined state-plus-county rate (roughly 6.5% to 9% depending on income and county) makes Maryland one of the higher-taxed states on the East Coast when local taxes are included. Workers considering a move within Maryland should compare county rates, as the difference between a 2.25% county and a 3.20% county on an $85,000 salary is nearly $810 per year.
Questions
Baltimore County income tax FAQ
How does Maryland's local income tax work?
Maryland is unique: every county and Baltimore City levies a local income tax, and it is collected through the state income tax return. You do not file a separate local return. The Comptroller of Maryland calculates your county tax automatically based on your residence as of December 31. Rates range from 2.25% to 3.20% depending on the county.
Is Baltimore County the same as Baltimore City for tax purposes?
No. Baltimore City and Baltimore County are separate jurisdictions in Maryland. They may have different local income tax rates. Baltimore City is an independent city, not part of Baltimore County. Your tax rate depends on which jurisdiction your primary residence falls in as of December 31 of the tax year.
Do I pay local tax based on where I live or where I work?
In Maryland, local income tax is based entirely on where you live, not where you work. If you live in Baltimore County and commute to Baltimore City for work, you pay the Baltimore County rate. If you live in Baltimore City and commute to the suburbs, you pay the Baltimore City rate. There is no separate work-city tax.
What are the Maryland county income tax rates?
Maryland county rates range from 2.25% to 3.20% depending on the jurisdiction. Each county sets its own rate within the range allowed by state law. The rates can change annually. For the current rate for your specific county, check the Maryland Comptroller's website, which publishes an updated rate table each tax year.
Do out-of-state residents who work in Maryland pay local tax?
Maryland charges a special nonresident tax rate instead of the county rate. Nonresidents who earn Maryland-source income pay a nonresident local income tax at a rate set by the state, applied uniformly regardless of where in Maryland they work. This replaces the county rate that residents pay. The nonresident rate is listed on the Maryland Comptroller's website.
- Sources: Comptroller of Maryland · MD Tax-General Article · Baltimore County Government.
- Last updated July 31, 2026
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