Maryland does not tax Social Security benefits

If you receive Social Security in Maryland, the state will not take a portion of those payments as income tax. Maryland exempts all Social Security benefits from state income tax, regardless of your total income or filing status. This exemption applies to retirement benefits, survivor benefits, and disability benefits paid by Social Security Administration.

The federal government may still tax your Social Security benefits depending on your combined income — but Maryland itself will not. This is one of the clearer rules in state tax law: if the money comes from Social Security, Maryland does not tax it.

Key Takeaways

  • Maryland does not tax Social Security retirement, survivor, or disability benefits under state law.
  • The federal government may still tax your Social Security depending on your combined income from all sources, but Maryland adds no state tax on top.
  • You do not need to report Social Security income on your Maryland tax return.
  • Other retirement income — pensions, 401(k) withdrawals, investment gains — may be taxable in Maryland even if your Social Security is not.

How Maryland's exemption works on your tax return

When you file your Maryland state income tax return, Social Security benefits do not appear as taxable income. You will not enter them on Form 502 (Maryland Individual Income Tax Return) or any supporting schedule. The state treats the income as completely exempt from taxation.

This means you cannot deduct Social Security from other income to lower your tax bill — because it was never taxable to begin with. If you have other sources of income (wages, pension, rental income, investment gains), those remain subject to Maryland tax. Social Security simply sits outside the system.

If you are filing federal taxes and your Social Security is partially taxable at the federal level, you will report that on your federal return. Maryland will not ask about it or tax it again.

Federal taxation of Social Security still applies

Maryland's exemption does not mean your Social Security is tax-free everywhere. The federal government taxes Social Security benefits based on your combined income — a calculation that includes half of your Social Security plus all other income (wages, pensions, interest, dividends, capital gains).

If your combined income exceeds certain thresholds, up to 50 percent or 85 percent of your Social Security benefits become taxable at the federal level. For 2024, those thresholds are $25,000 for single filers and $32,000 for married filing jointly (these thresholds have not changed since 1984). The exact amount of tax owed depends on how far over the threshold you go.

You will report any federally taxable Social Security on your federal Form 1040 and Schedule 1. Maryland will not tax that same income again — but you do owe federal tax if you cross the income threshold.

What counts as income for the federal threshold

The federal combined income calculation includes:

  • Wages and self-employment income
  • Taxable interest and dividends
  • Capital gains
  • Rental income
  • Pension and annuity payments
  • IRA and 401(k) withdrawals
  • Half of your Social Security benefits

Tax-exempt interest (such as from municipal bonds) counts toward the threshold even though it is not taxable. This is one reason some people with seemingly modest income still end up owing federal tax on Social Security.

If you are married filing separately, the threshold drops to $0 — meaning almost any combined income will trigger taxation of your benefits. This is one of the harshest rules in the tax code and applies regardless of whether you live in Maryland or elsewhere.

Other retirement income that Maryland does tax

While Social Security is exempt, Maryland taxes most other retirement income. Withdrawals from traditional IRAs, 401(k)s, and 403(b) plans are taxable. Pension payments from employers are taxable. Annuity payments are taxable. Investment income — interest, dividends, capital gains — is taxable.

Maryland does offer a limited retirement income subtraction for certain pension and annuity income, but the rules are narrow and phase out at higher income levels. Social Security has no such limitation — it is simply never taxed by the state.

If you are deciding how to structure withdrawals from retirement accounts, keep in mind that Maryland will tax those withdrawals but not your Social Security. This does not change the federal tax picture, but it is one factor in state-level tax planning.

Reporting Social Security on your Maryland return

You do not report Social Security income anywhere on your Maryland tax return. Form 502 and its schedules do not include a line for Social Security benefits. If you receive a Form SSA-1099 from Social Security Administration showing your annual benefits, you do not need to attach it to your Maryland return or reference it anywhere.

If you file federal taxes, you will have already reported any federally taxable portion on your federal return. Your Maryland return is separate and does not ask about Social Security at all.

If you are unsure whether you need to file a Maryland return based on your total income, remember that Social Security does not count toward the filing threshold. Only your other income matters for that decision.

Frequently Asked Questions

If Maryland does not tax Social Security, do I still have to file a state return?

That depends on your other income — wages, pensions, investment income, and so on. Social Security does not count toward Maryland's filing requirement. If your non-Social Security income is below the threshold for your filing status, you do not have to file. Check the current year's threshold on the Maryland Department of Revenue website or ask a tax preparer.

Will I owe Maryland tax if I am also taxed on Social Security federally?

No. If the federal government taxes part of your Social Security because your combined income is high, Maryland will not add state tax on top of that. The federal tax and Maryland tax are separate systems. Maryland simply does not tax Social Security under any circumstance.

Does the Maryland exemption apply to Supplemental Security Income (SSI)?

SSI is a different program from Social Security. SSI is also not taxed by Maryland or the federal government — it is a needs-based benefit, not earned income. If you receive SSI, neither state nor federal tax applies to those payments.

If I move out of Maryland, will my Social Security become taxable?

That depends on which state you move to. Some states tax Social Security; most do not. Federal tax rules apply everywhere. Before moving, check the tax treatment of Social Security in your new state — it can make a real difference in your tax bill.

Can I deduct Social Security from my Maryland taxable income?

No. Social Security is not taxable income in Maryland, so there is nothing to deduct. Deductions only reduce income that is already taxable. Since Maryland treats Social Security as exempt from the start, deductions do not apply.