1. What is Maryland Wage Tax Withholding?

Maryland wage tax withholding includes federal income tax, Maryland state income tax, FICA (Social Security and Medicare), and potentially local income taxes depending on the county. Employers must withhold these taxes from employee paychecks.

2. How Does the Calculator Work?

The calculator uses the following formula:

Where:

• Federal Tax - Based on IRS withholding tables, filing status, and allowances
• Maryland State Tax - Progressive tax rates (2% up to $1,000, etc.)
• FICA - 6.2% Social Security (up to wage base) + 1.45% Medicare
• Local Tax - Varies by county (e.g., 3.2% in Baltimore City)

3. Components of Maryland Tax Withholding

Federal Tax: Calculated using IRS withholding tables based on filing status (Single, Married, etc.) and number of allowances.

Maryland State Tax: Progressive rates from 2% to 5.75%. Local taxes vary by county and are in addition to state tax.

FICA: Social Security tax (6.2%) applies to wages up to $142,800 (2021), Medicare tax (1.45%) applies to all wages.

4. Using the Calculator

Tips: Enter gross pay before deductions, select federal filing status, enter number of allowances, and indicate if local taxes apply to your county.

5. Frequently Asked Questions (FAQ)

Q1: Which Maryland counties have local income tax?
A: All Maryland counties and Baltimore City have local income taxes, with rates ranging from 2.25% to 3.2%.

Q2: How often are Maryland tax brackets updated?
A: Maryland typically updates tax brackets annually for inflation.

Q3: Are there tax credits available in Maryland?
A: Yes, Maryland offers various credits including Earned Income Credit and Retirement Income Exclusion.

Q4: How does Maryland tax compare to other states?
A: Maryland has both state and local income taxes, making its overall tax burden higher than many states.

Q5: When are Maryland tax returns due?
A: Maryland follows the federal deadline, typically April 15.