Seniors and Retirees FAQs


  1. Do I have to file a Maryland return?
  2. What is Maryland's state income tax rate?
  3. How is the local income tax calculated?
  4. What's important to know about personal exemptions?
  5. What benefits are available for two-income couples?
  6. Does Maryland tax Social Security benefits?
  7. Can I claim Maryland's pension exclusion?
  8. Does Maryland offer a tax break for long-term care insurance?
  9. Is there a special tax benefit for military retirees?
  10. I am retired from the federal government. Can I have state tax withheld from my pension?

Seniors and Retirees Answers

  1. Do I have to file a Maryland return?

    As a senior citizen, one of the tax benefits you enjoy is a higher income allowance before you are required to file a Maryland income tax return. You are required to file a return if your gross income exceeds the amount listed for your filing status.

    For example, if you and your spouse are both 65 or older, are planning to file jointly, and you received less than $27,400 in gross income during 2020, you do not have to file a Maryland return.

    For more information, see Filing Requirement for Seniors.

  2. What is Maryland's state income tax rate?

    For tax year 2019, Maryland's graduated personal income tax rates start at 2.00% on the first $1,000 of taxable income and increase up to a maximum of 5.75% on incomes exceeding $300,000. Nonresidents are subject to a special nonresident tax rate of 1.75%, in addition to the state income tax rate. For more information, see Maryland Income Tax Rates and Brackets.

  3. How is the local income tax calculated?

    The local income tax is calculated as a percentage of your taxable income. Local officials set the rates, which range between 1.75% and 3.20% for tax year 2019.

    Your local income tax is based on where you live. Be sure to use the correct rate for your local jurisdiction. For more information, see Local Tax Rates.

  4. What's important to know about personal exemptions?

    If you have a federal adjusted gross income of up to $100,000 (up to $150,000 if filing jointly) you are entitled to a $3,200 exemption on the Maryland return for each exemption you are qualified to claim on the federal return. For taxpayers with higher incomes, the exemption amount is limited. See the Exemption Amount Chart included in Instruction 10 of the Maryland tax booklet

    You and your spouse may claim an additional $1,000 exemption on the Maryland return for being 65 years of age or older or blind. If any other dependent claimed is 65 or over, you also receive an extra exemption of up to $3,200.

    Make sure you check both boxes in columns 6 and 7 of the Exemptions section for each of your dependents who are age 65 or over. After you complete the Exemptions section, enter your total exemption amount on your Maryland return.

  5. What benefits are available for two-income couples?

    Married senior citizens who both receive wages, interest, pension, business or other kinds of income can subtract up to $1,200 or the income of the spouse, whichever is less.

    You can use the Two-Income Married Couple Subtraction Worksheet in Instruction 13 of the Maryland resident tax booklet to help calculate the correct subtraction amount for your situation.

  6. Does Maryland tax Social Security benefits?

    No. Taxpayers affected by the federal tax on Social Security and/or Railroad Retirement benefits can continue to exempt those benefits from state tax. Maryland tax law exempts from state tax only those Railroad Retirement benefits provided under the U.S. Railroad Retirement Act. Enter on line 11 of Maryland Form 502 all Railroad Retirement benefits and/or Social Security benefits that were taxable on your federal return and included on line 1 of Maryland Form 502.

  7. Can I claim Maryland's pension exclusion?

    If you are 65 or older or totally disabled (or your spouse is totally disabled), you may be able to subtract some of your taxable pension and retirement annuity income. Maryland's maximum pension exclusion is $31,100. Carefully review the age and disability requirements in Instruction 13 of the Maryland resident tax booklet.

    This subtraction applies only if:

    • You were 65 or older or totally disabled, or your spouse was totally disabled, on the last day of the tax year; and
    • You included on your federal return income received as a pension, annuity or endowment from an "employee retirement system." Please note that these include qualified defined benefit and defined contribution pension plans, 401(a) plans, 401(k) plans, 403(b) plans, and 457(b) plans.
    • A traditional IRA, a Roth IRA, a simplified employee plan (SEP), a Keogh Plan or an ineligible deferred compensation plan does not qualify.

    If you are not eligible for the standard pension exclusion above and you are a retired correctional officer, law enforcement officer or fire, rescue, or emergency services personnel, you may still qualify for a pension exclusion of up to $15,000 if you meet the following requirements:

    1. You were 55 or over on the last day of the tax year, AND
    2. You were not 65 or older, or totally disabled, or have a spouse who is totally disabled, AND
    3. You included on your federal return taxable income received as a pension, annuity or endowment from an employee retirement system. Please note that these include qualified defined benefit and defined contribution pension plans, 401(a) plans, 401(k) plans, 403(b) plans, and 457(b) plans of the Internal Revenue Code, AND
    4. The retirement income is attributable to your service as correctional officer, a law enforcement officer or fire, rescue, or emergency services personnel of the United States, the State of Maryland, or a political subdivision of Maryland.

    Instruction 13 of the Maryland resident tax booklet provides further details on claiming the subtraction.

  8. Does Maryland offer a tax break for long-term care insurance?

    If you purchase a long-term care insurance contract for yourself or certain members of your family, you may be eligible for a one-time credit of up to $500 for each insured. To qualify for the credit, the insured must be all of the following:

    • A spouse, parent, stepparent, child or stepchild.
    • A Maryland resident;
    • Not covered by long-term care insurance before July 1, 2000.
    • Not have the credit for the insured being claimed by another taxpayer.
    • Not have the credit claimed by anyone in any other tax year.

    For tax year 2019, you can claim a credit equal to the premiums paid, up to a maximum of $420 for each insured person 40 years of age or younger, and up to a maximum of $500 for each insured person over the age of 40.

    This tax credit must not have been claimed for the insured by another taxpayer in this year or anyone else in any other tax year. If the credit exceeds the tax liability, the unused credit may not be carried forward to any other tax year.

    Claiming the credit

    To claim the credit, you must file Maryland Form 502, 505 or 515. Complete Part E of Form 502CR and include Form 502CR with your return.

  9. Is there a special tax benefit for military retirees?

    If you or the spouse of a military retiree receives military retirement income, you will be able to subtract up to $5,000 of your military retirement income including death benefits from your federal adjusted gross income before determining your Maryland tax if the taxpayer has not yet attained the age of 55; or up to $15,000 of military retirement income, including death benefits if the taxpayer is age 55 or over.

    The retirement income must have been received as a result of any of the following military service:

    • Induction into the U.S. armed forces for training and service under the Selective Training and Service Act of 1940 or a subsequent Act of similar nature.
    • Membership in a reserve component of the U.S. armed forces.
    • Membership in an active component of the U.S. armed forces.
    • Membership in the Maryland National Guard.

    The benefit also applies to persons separated from active-duty employment with the commissioned corps of the Public Health Service, the National Oceanic and Atmospheric Administration, or the Coast and Geodetic Survey.

  10. I am retired from the federal government. Can I have state tax withheld from my pension?

    Yes. You can arrange for Maryland taxes to be withheld from your federal pension by visiting Retirement Services Online provided by the U.S. Office of Personnel Management. You can also obtain tax withholding assistance from the U.S. Office of Personnel Management by telephone at 1-888-767-6738 or by e-mail at retire@opm.gov.