Most states levy an income tax on their residents that is in addition to the federal income tax. Laws vary from state to state but in most states the state income tax is a tax on the annual earnings of individuals, corporations, trusts, limited liability companies, and other legal entities.
There are nine states that do not have a state income tax—including Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. But New Hampshire levies a tax on capital gains and Washington state recently enacted a tax on extraordinary profits from the sale of financial assets over $250,000.
In Maryland, residents are subject to both federal and state income taxes. The state income tax in Maryland is levied on the annual earnings of individuals, corporations, trusts, limited liability companies, and other legal entities. The rates for individual income tax in Maryland are progressive, meaning they increase as income rises. Maryland also allows counties and the city of Baltimore to collect a local income tax, which is in addition to the state income tax. The local income tax rates vary depending on the jurisdiction. It's important for residents to be aware of both the state and local income tax obligations to ensure compliance. Taxpayers in Maryland may also be eligible for various credits and deductions, which can reduce their taxable income. For specific advice and assistance with Maryland state income tax, consulting with an attorney or a tax professional is recommended.