As you have no doubt heard, the Maryland General Assembly enacted significant tax reforms as part of the FY 2026 budget to address a projected $3 billion deficit. These changes, effective beginning in tax year 2025, aim to modernize the tax code, increase revenue, and shift the tax burden toward higher-income earners and specific industries.
Of course, no one likes to face higher tax rates but it is now a reality for MD residents. Below is a summary of some of the specific changes we expect to impact our clients in 2025 and beyond.
Key Personal Income Tax Changes
New High-Income Tax Brackets: Two new brackets have been introduced:
Business and Consumption Tax Changes
Unsurprisingly, these tax increases have given rise to a number of clients inquiring about redomiciling to other lower or no tax states. If that is something you are considering please let us know. There are specific procedures that must be follow to become a MD non-resident and understanding those procedures beforehand can save you some hassle and possibly some taxes.
If you aren’t prepared to go through the process of moving but want to understand the true impact of these taxes on your situation, please feel free to contact us.
