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Maryland Tax Exemptions and Credits

The State of Maryland offers a number of tax exemptions and credits to veterans, active duty military personnel and surviving spouses.  For veterans with service connected disabilities rated at 100% ‘permanent and total’, property tax exemptions are available.  In addition there are deductions for military retirement pay, as well as tax credits and exemptions for vehicle and vessel registration.

Property Tax Exemption- Disabled Veterans and Surviving Spouses

Armed Services veterans with a permanent and total service connected disability rated 100% by the Veterans Administration may receive a complete exemption from real property taxes on the dwelling house and surrounding yard. These veterans also may apply at any time and do not have to meet the September 1 filing deadline. Certain unremarried surviving spouses may also be eligible for this exemption. Surviving spouses of military personnel killed in the line of duty may apply for an exemption.

To learn more call your local Maryland assessment office.  To find your local office and contact information visit the State Department of Assessments and Taxation website.

Application for property tax exemption

Source: Maryland State Department of Taxation

Retirement Pay and Pension Tax Deductions and Exclusions

Military Retirement Pay Income Tax Deduction

If you receive or the spouse of a military retiree receives military retirement income, you will be able to subtract up to $5,000, with an increase to the first $15,000 for individuals who are at least 55 years old on the last day of the taxable year, of your military retirement income from your federal adjusted gross income before determining your Maryland tax.  The retirement income must have been received as a result of any of the following military service:

  • Induction into the U.S. Armed forces for training and service under the Selective Training and Service Act of 1940 or a subsequent Act of similar nature
  • Membership in a reserve component of the U.S. armed forces
  • Membership in an active component of the U.S. armed forces
  • Membership in the Maryland National Guard

The benefit also applies to persons separated from active duty employment with the commissioned corps of the Public Health Service, the National Oceanic and Atmospheric Administration, or the Coast and Geodetic Survey.

Maryland Pension Exclusion

If you are 65 or older or totally disabled (or your spouse is totally disabled), you may qualify for Maryland’s maximum pension exclusion of $30,600 for tax year 2018 under the conditions described in Instruction 13 of the Maryland resident tax booklet. If you’re eligible, you may be able to subtract some of your taxable pension and retirement annuity income from your federal adjusted gross income.

This subtraction applies only if:

  • You were 65 or older or totally disabled, or your spouse was totally disabled, on the last day of the tax year; and
  • You included on your federal return income received as a pension, annuity or endowment from an “employee retirement system.” A traditional IRA, a Roth IRA, a simplified employee plan (SEP), a Keogh Plan or an ineligible deferred compensation plan does not qualify.

For more information visit a local office for tax payer assistance.  For locations, go to the Maryland Comptroller website.

To speak with the Maryland Taxpayer Service call:

  • From Central Maryland, 410-260-7980
  • From all other areas of Maryland, 1-800-MD-TAXES (1-800-638-2937)

Source: Maryland Office of the Comptroller

Vehicle Registration Tax Credit

As a new resident of Maryland, you must title your vehicle within 60 days of moving to Maryland.  Proof of military status (i.e. military ID or equivalent) must be submitted to be eligible for an excise tax credit.  If the owner is a member of the military on active duty or a member of their immediate family and has not been a Maryland resident for more than one year, an excise tax credit is allowed with proof of active military status.  If the owner is a Maryland resident on active duty or a member of their immediate family returning to this state, an excise tax credit is allowed if the vehicle is titled within one year of their return, with proof of active military status.

For more information on titling an out of state vehicle in Maryland visit the Motor Vehicle Administration website.

Source: Maryland Motor Vehicle Administration

Vessel Excise Tax Credit

A member of the armed services serving on active duty in the State is exempt from the 5% vessel excise tax for one year. The exemption applies only to vessels currently registered elsewhere and brought into Maryland because of the duty transfer. New purchases are not exempt.

For more information on the boat registration and vessel excise tax credit visit the Department of Natural Resources website.

Source: Maryland Department of Natural Resources





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