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.
Maryland Deductions & 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
The Part Maryland Does Not Do For You
Whatever Maryland takes, it takes on your net profit — and net profit is just what you earned minus what you can prove you spent. The proving is on you, and it is where most of the money leaks out.
TaxTidy is where the proof lives. Photograph a receipt and it reads the vendor, the amount and the date in about three seconds, then files the expense on its Schedule C line. Nothing gets typed in twice, and nothing depends on you remembering a purchase from eight months ago.
Because Maryland wants its own return alongside the federal one, the same organized record does double duty — one set of receipts, sorted once, ready for whichever deadline comes first. Your Audit Readiness Score shows you how solid that record is before anyone else asks.
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.
Start Tracking Your Maryland Business Expenses
Your first 25 scans are on us — free for life, no card required. Enough to sort this quarter's receipts by Schedule C line and see your Audit Readiness Score for the first time.
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