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2026 rules · verified against Maryland's primary source
Maryland partially exempts military retirement pay (up to about $20,000); the rest is taxable.
Subtract up to $12,500 of military retirement if under 55, or up to $20,000 if 55 or older on the last day of the tax year (Form 502).
Treatment
partially exempt
Exemption up to
$20,000
Top marginal rate
6.50%
Source: https://veterans.maryland.gov/benefits-services/tax-exemptions/retirement-pay-and-pension-tax-deductions-and-exclusion · verified July 2026
Estimated Maryland state income tax on your military retirement, using the top marginal rate on the taxable portion (an upper bound; your effective rate is usually lower).
More Maryland: all Maryland veteran benefits · military retirement tax in every state · what your pension is worth