Income tax withholding
| Imposes wage income tax | Yes |
|---|---|
| Rate structure | Graduated, top marginal rate 6.5% |
| Withholding certificate | MW507 Employee's Maryland Withholding Exemption Certificate |
| Accepts federal Form W-4 | No |
| Convenience-of-the-employer rule | No |
| Nonresident withholding threshold | From the first dollar Withholding required from the first dollar of Maryland-source wages; no de minimis day or dollar safe harbor. |
| Local income taxes | Yes EVERY Maryland county and Baltimore City imposes a local income tax, collected together with the state tax through payroll withholding at combined state+local rates. Nonresidents working in Maryland who are not covered by reciprocity pay a special nonresident rate (state rate plus a statutory nonresident surcharge) in lieu of a county rate. |
Reciprocity
Maryland exempts residents of 4 states from Maryland withholding, provided the employee files MW507 with the employer.
Maryland's reciprocal partners are the District of Columbia, Pennsylvania, Virginia and West Virginia -- corroborated by Pennsylvania Form REV-419 (which lists MD), Virginia Tax's reciprocity page (which lists MD), and West Virginia TSD-381 (which lists MD). CAUTION: the 2026 MW507 exemption checkbox as fetched lists only District of Columbia, Virginia and West Virginia by name; confirm with the Comptroller how a Pennsylvania resident claims the exemption on the current MW507 before configuring payroll.
States that exempt Maryland residents
A Maryland resident working in these states files that state's certificate and is taxed only by Maryland.
Unemployment insurance and paid leave
| Taxable wage base 2026 | $8,500 2025 base was $8,500. |
|---|---|
| New employer rate | 2.6% |
| Experience rate range | 0.3% – 7.5% |
| Experience-rating method | benefit ratio |
| Employee UI contribution | No |
| Paid family / medical leave | No Maryland FAMLI was delayed again: payroll contributions are now scheduled to begin January 1, 2027 and benefits no later than January 3, 2028. NOTHING is withheld or owed during 2026. |
Employer registration
- Tax agency
- Comptroller of Maryland
- UI agency
- Maryland Department of Labor, Division of Unemployment Insurance
Sources
marylandcomptroller.gov · tax.virginia.gov · tax.wv.gov · oui.doleta.gov · oui.doleta.gov · oui.doleta.gov · jacksonlewis.com