Maryland does not tax Social Security benefits

Maryland excludes all Social Security income from state income tax. If Social Security is your only income source, you will not owe Maryland state tax on it. This applies whether you receive retirement benefits, survivor benefits, or disability benefits (SSDI).

The federal government may still tax your Social Security depending on your total income, but Maryland itself takes no portion. This is one of the most favorable state tax treatments for Social Security recipients in the country.

Key Takeaways

  • Maryland does not tax Social Security retirement, survivor, or disability benefits at the state level.
  • Federal tax on Social Security depends on your combined income (wages, interest, pensions, and half your Social Security), not on Maryland's rules.
  • If Social Security is your only income, you typically owe no Maryland state tax and may owe no federal tax either.
  • You still must file a Maryland return if you have other income sources that push you above the filing threshold.

How Maryland's Social Security tax exemption works

Maryland's tax code explicitly excludes Social Security benefits from taxable income. This means the state does not count those dollars when calculating what you owe. You subtract the full amount of Social Security you received before applying Maryland's tax rates to your remaining income.

This exemption applies regardless of how much Social Security you receive or how old you are. There is no income limit that causes the exemption to phase out. A retiree with $100,000 in Social Security and a retiree with $15,000 in Social Security receive the same treatment: zero Maryland tax on those benefits.

Federal tax on Social Security is separate from Maryland tax

Even though Maryland does not tax Social Security, the federal government may. Whether you owe federal tax depends on your combined income, which includes wages, interest, dividends, pensions, and half of your Social Security benefits.

The IRS uses a formula based on your filing status and combined income to determine how much of your Social Security is taxable at the federal level. If your combined income is below certain thresholds, you owe no federal tax on Social Security. Those thresholds are: $25,000 for single filers, $32,000 for married filing jointly, and $0 for married filing separately.

For example, a single person with $20,000 in Social Security and $8,000 in pension income has a combined income of $28,000 (the $8,000 plus half the Social Security). This exceeds the $25,000 threshold, so some of the Social Security becomes taxable at the federal level. Maryland, however, still taxes only the $8,000 pension income.

When you must file a Maryland tax return despite receiving Social Security

You must file a Maryland return if your income from sources other than Social Security exceeds Maryland's filing threshold. For the 2024 tax year, that threshold is $12,200 for single filers and $24,400 for married filing jointly (these amounts adjust yearly for inflation).

Common income sources that trigger a filing requirement include wages from employment, self-employment income, pension or annuity payments, interest and dividends, rental income, and capital gains. Social Security itself does not count toward this threshold.

Even if you do not owe tax, filing a return may be worthwhile if you had Maryland income tax withheld from wages or other sources, because you could receive a refund.

How to report Social Security on your Maryland return

On Maryland Form 502 (the state income tax return), you report your Social Security income on the appropriate line but then subtract it as a deduction. The result is that Social Security appears on your return but contributes nothing to your tax liability.

You will receive a Social Security Benefit Statement (Form SSA-1099) each January showing how much you received in the prior year. Use this figure when completing your Maryland return. If you have multiple Social Security accounts (for example, as both a retiree and a survivor beneficiary), add all amounts together.

Keep your SSA-1099 with your tax records. If Maryland ever questions your return, this document proves the amount you reported.

Other Maryland tax breaks for retirees and seniors

Beyond the Social Security exemption, Maryland offers additional tax relief depending on your age and income. Residents age 65 and older may deduct up to $31,200 of retirement income (pensions, annuities, and distributions from retirement accounts) if their total income is below certain limits. This deduction phases out as income rises.

Maryland also allows a property tax credit for homeowners and renters with low incomes. The credit is based on your age, income, and property tax or rent paid. Seniors with limited income may receive a substantial credit even if they owe no income tax.

These programs are separate from the Social Security exemption and have their own income limits and filing requirements. If you are retired or over 65, review whether you may have access to for these additional breaks when you file.

Frequently Asked Questions

If I move to Maryland after receiving Social Security elsewhere, do I owe back taxes?

No. Maryland taxes only income earned or received while you are a resident. Social Security you received before moving to Maryland is not subject to Maryland tax, regardless of where you lived then. Your Maryland tax obligation begins on your move date.

Does Maryland tax my spouse's Social Security if we file jointly?

No. Maryland exempts all Social Security income from state tax, whether it is yours, your spouse's, or both combined. The exemption applies to each person's benefits individually, so filing status does not change the outcome.

What if I receive both Social Security and a pension—how does Maryland tax me?

Maryland taxes only the pension (or other non-Social Security income). The Social Security portion is excluded entirely. If your pension is below the filing threshold, you may owe no Maryland tax at all. The federal government, however, may tax some of your Social Security depending on your combined income.

Do I have to file a Maryland return if Social Security is my only income?

No, not for Maryland purposes. Since Social Security is not taxable in Maryland and does not count toward the filing threshold, you have no state filing requirement. You may still need to file a federal return depending on your age and total income, but that is a separate matter.