Maryland seniors can deduct property taxes on their federal income tax return, but state-level deductions are limited

If you own your home in Maryland and are 65 or older, you can deduct the property taxes you paid on your federal Form 1040 as an itemized deduction — but only if you itemize rather than take the standard deduction. Maryland itself does not offer a separate state income tax deduction for property taxes paid. However, Maryland does have a homestead property tax credit that works differently: it reduces your actual property tax bill, not your taxable income, and it targets lower-income homeowners specifically.

The choice between federal deduction and state credit depends on your income and how much you paid in property taxes. Many seniors benefit more from the state credit because it directly lowers what you owe the county, while the federal deduction only helps if your total itemized deductions exceed the standard deduction for your age.

Key Takeaways

  • Maryland's homestead property tax credit reduces your actual property tax bill if your household income is below a set threshold, which varies by county and changes yearly.
  • The federal property tax deduction (Schedule A) only saves you money if your total itemized deductions exceed the standard deduction, which is $28,700 for single filers age 65+ in 2024.
  • You cannot claim both the Maryland homestead credit and the federal deduction on the same property — you must choose the route that saves you more money.
  • The homestead credit requires you to file a form with your county assessor's office, not with the IRS, and deadlines vary by county.
  • If you rent rather than own, you may be able to claim a renter's tax credit in Maryland, which is a separate program.

How the Maryland homestead property tax credit works

The homestead property tax credit is a Maryland state program that reduces the property tax bill itself, not your income tax. You must own and live in the home as your primary residence, and your household income must fall below a limit set by your county. The income threshold and the credit amount both vary by county — there is no single statewide number.

To claim the credit, you file a form called the Maryland Homestead Property Tax Credit Application with your county assessor's office, not with your tax return. The deadline is usually in the spring (often April or May), though it varies by county. You will need proof of income, proof of ownership, and proof that you lived in the home during the tax year. Contact your county assessor's office directly to learn the exact income limit for your county and the deadline for that year.

If you are approved, the credit amount is calculated based on your income and your property tax bill. Lower-income homeowners receive larger credits. The credit is then applied to reduce your property tax bill — you pay less to the county, not to the IRS.

Federal property tax deduction on Schedule A

On your federal tax return, you can deduct property taxes paid as part of your itemized deductions on Schedule A (Form 1040). This deduction is not limited to seniors — anyone can claim it — but it only helps you if your total itemized deductions (property taxes, mortgage interest, charitable donations, and state and local income taxes) exceed the standard deduction for your filing status and age.

For 2024, the standard deduction for a single filer age 65 or older is $28,700. For a married couple filing jointly where at least one spouse is 65 or older, it is $35,550. If your itemized deductions add up to less than these amounts, you will take the standard deduction instead, and the property tax deduction will not reduce your taxable income at all.

There is also a cap on how much you can deduct for state and local taxes (property tax, state income tax, and sales tax combined) in a single year: $10,000 for most filers. This means even if you paid $15,000 in property taxes, you can only deduct $10,000 of it on your federal return.

Choosing between the state credit and the federal deduction

You cannot claim both the Maryland homestead credit and the federal property tax deduction on the same property in the same year. You must choose one. In most cases, lower-income seniors benefit more from the state credit because it directly reduces the property tax bill, while the federal deduction only helps if you itemize and only if your total deductions exceed the standard deduction.

If your household income is above your county's homestead credit limit, you are ineligible for the state credit and should focus on the federal deduction instead. If your income qualifies you for the state credit, compare the two: calculate what the credit would reduce your property tax bill by, then calculate what the federal deduction would reduce your federal income tax by. Choose whichever saves you more money that year.

Your tax preparer or the county assessor's office can help you run this comparison. Many seniors find that the state credit is the better option because the income limits are designed to target people with modest incomes, and the credit directly lowers what they owe.

Income limits and how they are set

Maryland does not set a single statewide income limit for the homestead credit. Instead, each county sets its own limit, and it changes every year based on inflation. For example, one county's limit might be $55,000 for a single filer in 2024, while another county's limit might be $60,000. These numbers shift annually.

To find your county's current income limit, contact your county assessor's office directly or visit the Maryland Department of Assessments and Taxation website. You will need to know your household income for the prior tax year (the year you are claiming the credit for). Household income typically includes wages, Social Security, pensions, interest, and dividends — but rules can vary, so ask your assessor's office what counts toward the limit in your county.

Documents you need to file for the state credit

When you apply for the Maryland homestead property tax credit with your county assessor's office, you will need to provide proof of several things. Bring a copy of your deed or property tax bill showing you own the home. Bring proof of income for the prior tax year — this can be a copy of your federal tax return, a Social Security statement, a pension statement, or a bank statement showing interest income. Bring proof that you lived in the home during the tax year, such as a utility bill or lease agreement (if you are a tenant claiming the renter's credit instead).

Different counties may ask for slightly different documents, so call ahead and ask what they need. Some counties allow you to mail the application; others require you to file in person. The deadline is usually in spring, but it varies by county, so do not wait until the last minute.

The renter's tax credit for seniors who do not own

If you rent rather than own your home in Maryland, you cannot claim the homestead property tax credit. However, Maryland offers a renter's tax credit that works similarly: it reduces your state income tax based on rent you paid during the year. The income limits and credit amounts are set by the state, not by county.

To claim the renter's credit, you file a form with your state tax return or with the Maryland Department of Assessments and Taxation. You will need proof of rent paid (lease agreement, cancelled checks, or a letter from your landlord) and proof of income. The credit is smaller than the homestead credit for most people, but it is available to renters with may have access to income.

Frequently Asked Questions

Can I claim both the homestead credit and the federal deduction in the same year?

No. You must choose one or the other for the same property in the same tax year. Most people benefit more from whichever option saves them the most money — usually the state credit for lower-income seniors, and the federal deduction for higher-income homeowners who itemize.

What if I own my home but my income is too high for the homestead credit?

You can still deduct your property taxes on your federal return using Schedule A, as long as your total itemized deductions exceed the standard deduction and you do not exceed the $10,000 cap on state and local taxes combined.

Do I have to file a separate form for the homestead credit, or does it go on my tax return?

The homestead credit is filed with your county assessor's office, not with your federal or state tax return. It is a separate application with its own deadline, usually in spring. Contact your county assessor to learn the exact deadline and what forms they need.

If I move during the year, can I still claim the homestead credit?

You must have owned and lived in the home for the entire tax year to claim the full credit. If you moved partway through the year, ask your county assessor whether you can claim a partial credit or whether you are ineligible for that year.

Does Social Security count as income for the homestead credit?

Yes, Social Security is counted as household income for the homestead credit in Maryland. Other income sources that count include pensions, wages, interest, and dividends. Ask your county assessor's office for the exact definition of household income they use, as it can vary slightly.