Maryland vs Pennsylvania Taxes
Compare the total tax burden between Maryland (2% – 5.75%) and Pennsylvania (3.07% flat). Enter your income to see which state saves you more.
Maryland vs Pennsylvania: The I-83 corridor where a 30-mile move saves thousands
Maryland and Pennsylvania form one of America's most tax-sensitive commuter corridors, particularly along the I-83 corridor connecting Baltimore to York, PA. Maryland's combined tax burden is among the highest on the East Coast: a top state rate of 5.75% plus mandatory county income taxes ranging from 2.25% to 3.2%, creating effective rates of 8-9% for many residents. Pennsylvania's flat 3.07% rate is less than half Maryland's combined burden.
This tax gap has driven a steady migration northward. York County, PA and Adams County, PA have absorbed thousands of former Maryland residents who commute to Baltimore or work remotely. The appeal is straightforward: a worker earning $150,000 saves roughly $7,000-$9,000 per year in state and local income taxes by living in southern Pennsylvania versus the Baltimore suburbs. Housing is also significantly cheaper—median home prices in York are about 40% below Baltimore County.
Pennsylvania does have its own quirks. The state's 3.07% flat tax applies to all income with very few deductions—no standard deduction, no personal exemption to offset the rate. Some Pennsylvania municipalities levy additional earned income taxes of 1-2%, and school districts can impose additional taxes. Property taxes in PA average 1.36%, considerably higher than Maryland's 0.99%. But for most mid-to-high earners, the income tax savings from PA's low flat rate dramatically outweigh the property tax difference.
Key Differences Beyond Income Tax
| Category | Maryland | Pennsylvania |
|---|---|---|
| Local Income Tax | Mandatory county income tax of 2.25%-3.2% on top of state rate; total combined rate 7.75%-8.95% | Some municipalities levy earned income tax of 1-2%; not universal; total rate typically 3.07%-5% |
| Property Tax | Effective rate ~0.99%; Homestead Tax Credit available; Baltimore City rate notably higher at ~1.8% | Effective rate ~1.36%; wide variation by school district; some districts over 2% |
| Sales Tax | Flat 6% statewide; no local additions; clothing exempt | Flat 6% statewide; no local additions; clothing, groceries, and most food exempt |
| Retirement Income | Social Security exempt; pension income exempt for retirees meeting certain requirements; 401k/IRA withdrawals taxed | Social Security fully exempt; all retirement income (pensions, 401k, IRA) fully exempt from state income tax after age 59½ |
| Estate Tax | State estate tax with $5M exemption; inheritance tax repealed | No state estate tax, but inheritance tax of 4.5%-15% depending on relationship to deceased |
Who Benefits from Moving?
Baltimore commuters earning $120K+
A worker earning $120,000 living in Baltimore County pays roughly $6,900 in state income tax plus $3,600 in county income tax (3.2%), totaling $10,500. Moving to York, PA drops the total to about $3,684 (3.07% flat). That's $6,816 in annual savings—even accounting for PA's higher property taxes (~$1,500 more on a comparable home), the net savings exceed $5,000.
Retirees with pension and 401k income
A retiree drawing $90,000 from a pension and 401k pays roughly $7,200 in combined Maryland state and county taxes. In Pennsylvania, retirement income is completely exempt after age 59½—the tax bill is $0. This is one of the most valuable retirement tax benefits in the Mid-Atlantic.
Federal workers in the D.C. metro area
Maryland's county income tax hits federal employees hard: a GS-14 earning $130,000 in Montgomery County pays about $11,300 in combined state/county tax. PA's 3.07% rate would yield $3,991. The $7,300 savings is enormous, though the commute from southern PA to D.C. is only feasible for hybrid or remote workers.
Bottom line: At $150,000 income, moving from Maryland (with a typical 3% county tax) to Pennsylvania saves roughly $8,100 in combined state and local income taxes—one of the largest border-state savings corridors on the East Coast.
Tax at Different Income Levels
| Income | Maryland Total Tax | Pennsylvania Total Tax | Annual Savings |
|---|---|---|---|
| $75,000 | $16,448 | $15,505 | Save $943 |
| $100,000 | $25,048 | $23,685 | Save $1,363 |
| $150,000 | $42,975 | $40,663 | Save $2,312 |
| $200,000 | $60,029 | $56,542 | Save $3,487 |
Based on single filer, standard deduction, 2025 tax year. Includes federal income tax, state income tax, and FICA.
Why the difference
You'd save $1,363/year ($114/month) in Pennsylvania vs Maryland.
Tax structure
Maryland uses progressive brackets up to 5.8%, while Pennsylvania has a flat 3.1% state income tax.
Effective rate at your income
At $100,000, Pennsylvania's effective state rate is 2.6% vs 3.9% in Maryland — a 1.4 percentage point gap.
Pennsylvania local taxes
Many Pennsylvania municipalities levy an earned income tax (typically 1-3%); Philadelphia wage tax is 3.75% for residents.
Tip: In a progressive-bracket state, pre-tax 401(k) and HSA contributions reduce your state tax bill along with federal tax. If you are near a bracket boundary, an additional contribution can drop you into a lower state bracket.
Tip: PA's low flat rate benefits high earners, but the Philadelphia wage tax adds significantly for city workers. If you live outside Philadelphia but work in the city, the non-resident wage tax is 3.44%. PA's exemption of retirement income makes it attractive for retirees.
Understanding Each State
Maryland
This state uses a progressive income tax system with multiple brackets, similar to the federal system. Only the income within each bracket is taxed at that rate, so your effective state rate is lower than the top bracket. Tax planning strategies include maximizing pre-tax retirement contributions to reduce state-taxable income.
Tip: In a progressive-bracket state, pre-tax 401(k) and HSA contributions reduce your state tax bill along with federal tax. If you are near a bracket boundary, an additional contribution can drop you into a lower state bracket.
Pennsylvania
Pennsylvania has a flat income tax rate of 3.07% — one of the lowest flat rates in the US. Some municipalities levy an additional earned income tax (typically 1-3%), and Philadelphia residents pay a 3.75% wage tax. PA does not tax retirement income (401k, IRA, Social Security).
Tip: PA's low flat rate benefits high earners, but the Philadelphia wage tax adds significantly for city workers. If you live outside Philadelphia but work in the city, the non-resident wage tax is 3.44%. PA's exemption of retirement income makes it attractive for retirees.
Key Comparison Points
Income tax structure: Maryland has a progressive income tax (2% – 5.75%), while Pennsylvania has a flat income tax (3.07% flat).
Beyond income tax: State tax comparisons should also consider property tax rates, sales tax, and cost of living. A state with no income tax may have higher property or sales taxes that offset the savings.
SALT deduction cap: Under OBBBA (2025+), the federal SALT cap is $40,000, phasing out above $500,000 MAGI toward a $10,000 floor. This limits the federal tax benefit of living in a high-tax state, so the gross state tax difference remains close to the net difference for most earners — especially high earners inside the phaseout.
Frequently asked questions
Is it cheaper to live in Maryland or Pennsylvania?
Based on income tax alone, Pennsylvania has a lower tax burden. At $100K income, you'd save $1,363 annually in Pennsylvania compared to Maryland. However, total cost of living also depends on property taxes, sales taxes, and housing costs.
How much would I save moving from Maryland to Pennsylvania?
A single filer earning $100,000 would save approximately $1,363 per year in total taxes by living in Pennsylvania instead of Maryland. At $150,000 income, the savings change to $2,312 per year.
What is the income tax rate in Maryland?
Maryland has a progressive income tax with rates of 2% – 5.75%.
What is the income tax rate in Pennsylvania?
Pennsylvania has a flat income tax with rates of 3.07% flat.