Does Maryland tax Social Security?

No. Social Security benefits are fully exempt from Maryland state and local income tax. They never appear in your Maryland taxable income, which is why the tool zeroes that line regardless of the amount you enter.

What is the Maryland pension exclusion?

Taxpayers who are 65 or older or totally disabled can exclude up to $39,500 of qualifying pension, 401(k), and 403(b) income for 2025. The exclusion is reduced dollar-for-dollar by any Social Security benefits you receive, so a large Social Security check shrinks the available exclusion.

Are IRA withdrawals taxed in Maryland?

Yes. Traditional IRA distributions are taxable as ordinary income in Maryland and do not qualify for the pension exclusion, which is limited to employer pensions and 401(k)/403(b) plans. They are taxed at the state graduated rates plus your county local rate.

What is the senior tax credit?

Maryland offers an additional senior tax credit of up to $1,000 for a single filer 65+ and up to $1,750 for a married couple where both spouses are 65+. The tool applies it against your calculated state tax after the pension exclusion.

Does this include federal tax?

No. This tool estimates only Maryland state and county income tax on your retirement income. Federal tax on Social Security, pensions, and IRA withdrawals is a separate calculation and is not reflected in the totals here.

Maryland Retirement Income Tax Calculator

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Maryland is moderately retiree-friendly: it fully exempts Social Security and offers a generous pension exclusion and a senior tax credit, but it still taxes IRA and 401(k) withdrawals once they exceed those allowances. This calculator walks each income stream through Maryland’s specific rules so you can see your real state and local tax in retirement.

How it works

The tool removes the exempt and excluded amounts before taxing what’s left:

Social Security      → fully exempt (always $0 Maryland tax)
pension exclusion    = min(pension, $39,500 − Social Security received)   [if 65+]
taxable income       = (pension − exclusion) + traditional IRA
state tax            = taxable income through MD's 2%–5.75% brackets
senior credit        = up to $1,000 single / $1,750 joint  [if 65+]
local tax            = taxable income × county rate (2.25%–3.20%)
total                = (state tax − credit) + local tax

The Social Security offset is the key wrinkle: every dollar of Social Security reduces the pension exclusion you can claim, so the two benefits don’t simply stack.

Example and notes

A single 65-year-old with $28,000 of Social Security, a $24,000 pension, and a $12,000 IRA withdrawal gets an exclusion of $39,500 − $28,000 = $11,500, leaving $12,500 of pension plus the full $12,000 IRA as taxable — about $24,500. The senior credit then trims the state tax. Confirm the current exclusion amount and your county rate with the Maryland Comptroller; this is a planning estimate, not tax advice, and excludes federal tax.