During the 2025 legislative session, the Maryland General Assembly enacted several changes to the income tax rates in the Budget Reconciliation and Financing Act of 2025.

Changes include:

• Counties and Baltimore City may now impose a maximum local income tax rate of 3.30% in a tax year beginning after Dec. 31, 2024.
• The legislation retains Maryland’s progressive personal income tax rate schedule up to the 5.75% bracket, caps that bracket, and adds two new income tax brackets for high-income earners on Maryland Taxable Income for tax years beginning after Dec. 31, 2024.
• At the state level, the legislation eliminates the income-based phase-in and indexes future increases to cost-of-living adjustments.
• Beginning in tax year 2025, taxpayers with FAGI in excess of $200,000 must reduce the amount of their otherwise allowable itemized deductions by an amount equal to 7.5% of FAGI in excess of $200,000.

Learn more information here.