Retiring in Maryland: how your income is taxed
Maryland is fairly tax-friendly for retirees. On a typical retirement income it ranks #35 of 51 for the lowest state income tax.
The rules in Maryland
- Social Security: Maryland does not tax Social Security or Railroad Retirement benefits.
- Pensions: At 65+ (or if totally disabled) you can exclude up to $40,600 for 2026 ($41,200 for 2025) of income from employer retirement plans, minus Social Security and Railroad Retirement benefits received. There is also a senior tax credit of $1,000, or $1,750 for a joint return with both spouses 65+, for federal AGI up to $100,000 single / $150,000 joint. County income tax also applies. Public safety retirees may subtract up to $15,000. Military retirement: up to $12,500 can be subtracted under age 55 and $20,000 at 55+.
- 401(k), 403(b) and IRA withdrawals: 401(k), 403(b) and 457(b) withdrawals from employer plans share the $40,600 pension exclusion at 65 and older. IRA, Roth IRA, rollover IRA, SEP and Keogh withdrawals do not qualify and are fully taxed.
- At 65 and older: Each filer 65 or older gets an extra $1,000 exemption, which is not reduced at higher incomes.
Calculate your Maryland retirement taxes
State income tax in Maryland: $677 a year
In Maryland, the 401(k)/IRA amount counts as IRA withdrawals, which don't qualify for the pension exclusion. Enter withdrawals from employer plans such as a 401(k) or 403(b) as pension.
In Maryland you'd pay about $677 in state income tax and $4,336 in federal income tax on $70,000 of retirement income, keeping $64,987 (7.2% total).
Maryland ranks #35 of 51 for the lowest state tax on this income. 19 states charge no state income tax on this income.
What retirees pay in Maryland
| Retirement income | State tax (single) | State tax (married) | Federal tax (single) |
|---|---|---|---|
| $24,000 Social Security, $12,000 401(k)/IRA | $138 | $0 | $0 |
| $30,000 Social Security, $20,000 pension, $20,000 401(k)/IRA | $677 | $152 | $4,336 |
| $40,000 Social Security, $40,000 pension, $50,000 401(k)/IRA, $10,000 other income | $7,158 | $1,722 | $19,812 |
Age 67 or older, 2026 rules including the federal senior deduction. For married couples, income is the household total and both spouses are 67 or older. State estimates apply Maryland's main exclusions and may differ for income-tested credits. The 401(k)/IRA amounts are treated as IRA withdrawals, which don't qualify for Maryland's pension exclusion; withdrawals from employer plans such as a 401(k) or 403(b) do. Enter those as pension in the calculator.
States with lower retirement taxes
Moving to Maryland in retirement?
Compare the tax on your Social Security, pension and 401(k)/IRA income, and typical living costs, with the state you'd leave. These are the states most households moving to Maryland come from (IRS migration data, 2022–2023).
- Virginia to Maryland
- Washington, DC to Maryland
- Pennsylvania to Maryland
- Florida to Maryland
- New York to Maryland
- California to Maryland
Frequently asked questions
Does Maryland tax Social Security?
Not taxed. Maryland does not tax Social Security or Railroad Retirement benefits.
Does Maryland tax pensions?
Partly taxed. At 65+ (or if totally disabled) you can exclude up to $40,600 for 2026 ($41,200 for 2025) of income from employer retirement plans, minus Social Security and Railroad Retirement benefits received. There is also a senior tax credit of $1,000, or $1,750 for a joint return with both spouses 65+, for federal AGI up to $100,000 single / $150,000 joint. County income tax also applies. Public safety retirees may subtract up to $15,000. Military retirement: up to $12,500 can be subtracted under age 55 and $20,000 at 55+.
Does Maryland tax 401(k) and IRA withdrawals?
Partly taxed. 401(k), 403(b) and 457(b) withdrawals from employer plans share the $40,600 pension exclusion at 65 and older. IRA, Roth IRA, rollover IRA, SEP and Keogh withdrawals do not qualify and are fully taxed.
Is Maryland a good state to retire for taxes?
For a single retiree with $30,000 Social Security, $20,000 pension, $20,000 401(k)/IRA, Maryland charges about $677 in state income tax, ranking #35 of 51 (lowest tax first).
Related
Sources: services.marylandcomptroller.gov, marylandcomptroller.gov, mgaleg.maryland.gov, news.bloombergtax.com, kiplinger.com. Rules reviewed . Some 2026 amounts were not yet published or sources differed; confirm with the state revenue department.