Maryland Small Business Tax Guide — 2026
Income Tax Rate
2% — 5.75% state + 2.25% — 3.2% county (progressive)
Sales Tax Rate
6%
Filing Deadline
April 15 (matches federal deadline)
Maryland Income Tax
Maryland imposes a state income tax with rates of 2% — 5.75% state + 2.25% — 3.2% county (progressive). Self-employed individuals, freelancers, and sole proprietors pay this tax on their net business income in addition to federal income tax and federal self-employment tax (15.3%).
Self-Employment in Maryland
Maryland imposes state income tax up to 5.75% plus mandatory county income tax (2.25% — 3.2%). Total combined rate can reach nearly 9%. No separate state SE tax.
Estimated Tax Requirements
Quarterly estimated payments required if you expect to owe $500 or more. Standard federal due dates apply.
MarylandDeductions & Credits
- Maryland standard deduction: 15% of AGI, min $1,800 / max $2,550 (single)
- Maryland does not conform to the federal QBI deduction
- Subtraction for military retirement income
- Credit for taxes paid to other states
Business Filing Fees
LLC: $100 formation + $300 annual report (called personal property return). Corporation: $120 formation + $300 annual report.
Key Facts About Maryland Taxes
- Maryland's mandatory county income tax adds 2.25% to 3.2% on top of state rates
- Combined state and county rates can approach 9% for high earners
- Maryland does not conform to the federal QBI deduction
- Annual LLC report costs $300 — relatively expensive
Track Your Maryland Business Expenses
TaxTidy helps Maryland freelancers and self-employed individuals track every business expense with AI-powered receipt scanning. Snap a photo of any receipt and TaxTidy instantly extracts the vendor, amount, and tax category — then maps it to the correct IRS Schedule C line. At tax time, generate an audit-ready PDF report with all your deductions organized and totaled.
Frequently Asked Questions
What is the total Maryland income tax rate?
Maryland state tax ranges from 2% to 5.75%, plus a mandatory county tax of 2.25% to 3.2%. Combined total can approach 9% for high-income self-employed individuals.
Does Maryland allow the QBI deduction?
No. Maryland does not conform to the federal Section 199A QBI deduction. You cannot deduct up to 20% of qualified business income on your Maryland return.
When are Maryland estimated taxes due?
Quarterly on April 15, June 15, September 15, and January 15. Required if you expect to owe $500 or more.
Official source: Maryland Department of Revenue
TaxTidy provides expense organization tools based on the most current US tax law available to it. TaxTidy is not a CPA, Enrolled Agent, or licensed tax professional. All categorizations, deductions, and tax calculations are estimates. Please verify all data for accuracy and consult a certified tax professional before filing.
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