Retiring in Maryland

Every figure below is sourced to Maryland’s own publications and dated. Estimates only, and not tax advice.

Retirement tax by state

What your state actually takes from a 401(k) withdrawal, a pension, and Social Security — in dollars, not a yes/no list.

Brokerage account growth

Long-term index-fund growth after expense-ratio drag — and what your state takes from the gains at withdrawal.

Roth vs. Traditional

Decided on the two rates that actually govern it — yours now, and yours at withdrawal, in the state you'll retire in rather than the one you're in.

Contribution limit optimizer

2026 limits, employer match, the 60-63 super catch-up, and whether the Roth catch-up mandate applies to you.

Required minimum distribution

When your RMDs start under SECURE 2.0, how much this year's is, and what missing it costs.

Backdoor Roth pro-rata

What a backdoor Roth conversion would actually cost you in tax — the pro-rata rule most calculators only describe.

Self-directed IRA real estate (UDFI)

The tax a leveraged rental owes inside a self-directed IRA — computed at trust rates, not the rate you'd assume.

Maryland at a glance

401(k) and IRA withdrawals
Partly excluded
From age 65.
Social Security
Not taxed
Top marginal rate
6.5%
The top of 10 graduated brackets.
Tax year
2026
Brackets are legislated and change on a fixed calendar, so the year matters.
  • Maryland also offers a nonrefundable SENIOR TAX CREDIT of $1,000 for a resident at least 65 on the last day of the year with federal AGI not over $100,000 filing single, or $1,750 for married filing jointly, qualifying surviving spouse and head of household with federal AGI not over $150,000 - reduced to $1,000 if only one spouse on a joint return is at least 65. It is claimed on Part M of Form 502CR and is separate from, and stackable with, the pension exclusion.
  • A taxpayer at least 100 years old may subtract up to $100,000 of income.
  • Married senior citizens who both have income and file jointly may take a two-income subtraction of up to $1,200, or the income of the lower-earning spouse if less.
  • MARYLAND RETIREES PAY LOCAL INCOME TAX TOO. The county rate applies to Maryland taxable income after these subtractions, so a retiree in Dorchester or Kent County pays 3.30% on top of the state schedule while one in Worcester pays 2.25% - a spread worth more than a full state bracket step.

Local income tax applies in parts of Maryland

EVERY Maryland county and Baltimore City levies a local income tax, and it is large enough that ignoring it misstates a Maryland tax bill by roughly a third. The rates listed are the ACTUAL 2026 local income tax rates published by the Comptroller, not withholding-table approximations. The 2026 range is 2.25% (Worcester) to 3.30% (Dorchester and Kent), against a statutory maximum of 3.30% that took effect for tax years beginning after December 31, 2025. Two counties changed for 2026: Allegany rose from 3.03% to 3.20% and Kent from 3.20% to 3.30%. TWO COUNTIES ARE OMITTED FROM THE LIST ABOVE ON PURPOSE, because a single rate would be false for them: Anne Arundel and Frederick both use BRACKETED local rates, and a flat number cannot represent either. Anne Arundel 2026: 2.70% on Maryland taxable net income of $1 through $50,000, 2.94% from $50,001 through $400,000, and 3.20% above $400,000 for single, married-separate and dependent filers; the same three rates apply for married-joint, head-of-household and qualifying surviving spouse at breakpoints of $75,000 and $480,000. Frederick 2026: 2.25% up to $25,000, 2.75% from $25,001 to $50,000, 2.96% from $50,001 to $150,000, and 3.20% at $150,001 or more for single/married-separate/dependent; for married-joint, head-of-household and qualifying surviving spouse the bands are 2.25% to $25,000, 2.75% to $100,000, 2.96% to $250,000 and 3.20% above $250,000. THE LOCAL TAX IS COMPUTED ON MARYLAND TAXABLE INCOME, NOT ON THE STATE TAX: the Comptroller states plainly that the local income tax is computed without regard to the state tax rate. Rate is set by COUNTY OF RESIDENCE, not county of work. Nonresidents generally pay no local rate but are charged an additional state tax at the lowest local rate, 2.25%.