Maryland property taxes are deductible on your federal tax return, but only if you itemize deductions instead of taking the standard deduction

You can deduct Maryland property taxes paid on your primary residence and any other real property you own. The deduction appears on Schedule A (Itemized Deductions) when you file your federal tax return. However, this only saves you money if your total itemized deductions exceed the standard deduction for your filing status — most people do not itemize, so they receive no benefit from this deduction.

Maryland itself does not offer a separate state-level property tax deduction on your state return. You report what you paid to Maryland and that amount is part of your federal calculation, but Maryland's tax code does not reduce your state tax bill based on property taxes paid.

Key Takeaways

  • Property taxes on your Maryland home and other real property are deductible on your federal return only if you itemize deductions on Schedule A.
  • The federal deduction is capped at $10,000 per year for all state and local taxes combined (property tax, income tax, and sales tax together).
  • Most taxpayers benefit more from the standard deduction than from itemizing, so the property tax deduction does not reduce their federal tax bill.
  • Maryland does not offer a state property tax deduction; you pay Maryland tax on your full income without a reduction for property taxes paid.

The $10,000 cap on state and local tax deductions

When you itemize deductions on your federal return, property taxes count toward the SALT deduction (state and local taxes). This deduction includes Maryland property taxes, Maryland income tax, and any sales tax you paid — but the total cannot exceed $10,000 per year, regardless of how much you actually paid.

If you paid $8,000 in Maryland property tax and $3,000 in Maryland income tax, your SALT deduction would be capped at $10,000, not $11,000. This cap applies to all filers, whether you are married filing jointly or single. The cap has been in place since 2018 and is set to expire at the end of 2025 unless Congress extends it.

When itemizing saves you money versus the standard deduction

Itemizing only reduces your federal tax if your total itemized deductions exceed the standard deduction for your filing status. For 2024, the standard deduction is $14,600 for single filers and $29,200 for married couples filing jointly. If your property taxes, mortgage interest, charitable donations, and other itemizable expenses add up to less than these amounts, you will pay less federal tax by taking the standard deduction instead.

Example: A single filer with $8,000 in Maryland property tax and $2,000 in charitable donations has $10,000 in itemized deductions. The standard deduction for a single filer is $14,600. This person should take the standard deduction and receive no tax benefit from the property tax paid.

If the same filer had $9,000 in property tax, $8,000 in mortgage interest, and $2,000 in charitable donations, the total would be $19,000 — more than the $14,600 standard deduction. In that case, itemizing would save money, and the property tax deduction would be part of that benefit.

What counts as a deductible Maryland property tax

You can deduct property taxes you paid directly to Maryland counties or municipalities on real property you own. This includes your primary residence, a second home, rental property, and vacant land. The tax must be based on the assessed value of the property and must be a tax imposed by a government body — not a fee for a specific service like trash collection or water usage.

You cannot deduct property taxes you did not actually pay. If you are a renter, you pay no property tax directly, so there is nothing to deduct. If you own a home with a mortgage, you deduct only the property tax you paid; your lender may pay it from your escrow account, but you still report the amount you paid (or that was paid on your behalf from your escrow funds).

Homeowners association fees, transfer taxes, and recording fees do not count as property taxes and cannot be deducted. Only the annual property tax bill imposed by your county or municipality qualifies.

How to report the deduction on your federal return

You report Maryland property taxes on Schedule A (Form 1040), which is the form for itemized deductions. Line 5a of Schedule A is labeled "State and local taxes (SALT)" — this is where you enter your property taxes, capped at $10,000 when combined with other state and local taxes.

You will need your Maryland property tax bill or a statement from your county showing the amount you paid during the tax year. If your lender paid the tax from your escrow account, your mortgage statement or a Form 1098 (Mortgage Interest Statement) will show the amount. Keep this documentation in case the IRS asks for proof.

If you do not itemize — meaning your standard deduction is higher than your total itemized deductions — you do not file Schedule A at all, and the property tax you paid does not reduce your federal tax bill.

Maryland state tax treatment of property taxes

Maryland does not allow you to deduct property taxes when calculating your Maryland state income tax. You report your federal taxable income to Maryland, and Maryland calculates your state tax based on that federal number, but there is no separate line or deduction for property taxes paid.

Maryland does offer a Property Tax Credit for certain low-income homeowners and renters, but this is a different mechanism than a deduction. The credit directly reduces the tax you owe to Maryland, rather than reducing your taxable income. You must meet income limits and file a separate form to claim it — it is not automatic.

Frequently Asked Questions

Can I deduct property taxes if I take the standard deduction?

No. The property tax deduction only works if you itemize deductions on Schedule A. If you take the standard deduction, you receive no tax benefit from property taxes paid, because the standard deduction is a flat amount that does not require you to list individual expenses.

What if I paid property taxes late or early — does the year I paid matter?

Yes. You deduct property taxes in the year you actually paid them, not the year they were assessed or due. If you paid 2024 property taxes in January 2025, you deduct them on your 2025 return. This timing can matter if you are close to the $10,000 SALT cap.

Do I deduct property taxes on a rental property I own in Maryland?

Yes, you can deduct property taxes on rental property. However, rental property taxes are deducted on Schedule E (Rental Income and Loss), not on Schedule A. The $10,000 SALT cap applies only to personal property taxes reported on Schedule A, not to business or rental property taxes.

If my spouse and I file separately, does each of us get a $10,000 cap?

No. The $10,000 SALT cap applies per return, not per person. If you file separately, each return has a $10,000 cap, but married couples filing jointly share a single $10,000 cap for both spouses combined.

Will the property tax deduction still exist after 2025?

The $10,000 SALT cap is currently set to expire at the end of 2025. What happens after that depends on whether Congress extends it, modifies it, or lets it expire. Until Congress acts, plan based on the current $10,000 limit.