During the 2025 legislative session, the Maryland General Assembly passed the Budget Reconciliation and Financing Act (BRFA), which makes several changes to Maryland’s tax laws beginning in the 2025 tax year and beyond.

The BRFA contained numerous changes to the tax code that the Office of the Comptroller is responsible for implementing. Changes include:

• Adding two new tax brackets and rates for the state’s personal income tax
• Adding a 2% surcharge on capital gains income for households earning more than $350,000 in federal adjusted gross income (AGI)
• Creating a phase-out for itemized deductions for households earning more than $200,000 in federal AGI
• Expanding Maryland’s general sales tax to digital and IT services at a rate of 3%.

The Office of the Comptroller has created a webpage for taxpayers and tax professionals to refer to for these and other changes based on passage of the BRFA. It also held webinars for business owners and tax professionals that can be viewed on the Comptroller’s YouTube page. A copy of the slide deck from the webinars can be found here. Please contact Maryland State Director, Mike O’Halloran, with questions.