Virginia vs Maryland Taxes
Compare the total tax burden between Virginia (2% – 5.75%) and Maryland (2% – 5.75%). Enter your income to see which state saves you more.
Maryland vs Virginia: The DC metro's two-state tax puzzle
Maryland and Virginia split the Washington, DC metropolitan area, and hundreds of thousands of federal workers, contractors, and private-sector employees choose between the two states every day. Virginia's top income tax rate is 5.75% on income above $17,001, making it effectively a near-flat tax for most earners. Maryland's top state rate is also 5.75%, but Maryland adds local (county) income taxes ranging from 2.25% to 3.20%—pushing the combined top rate to 8.95% in the highest-tax jurisdictions like Howard and Montgomery counties.
This local tax surcharge is the key difference. A household earning $150,000 in Montgomery County, Maryland, pays roughly $11,500 in combined state and local income tax. The same household in Fairfax County, Virginia, pays about $8,200 in state income tax—a $3,300 annual gap. For high earners, the difference is even starker: at $300,000, the Maryland combined rate can generate $5,000-$7,000 more in taxes than Virginia.
Property taxes add nuance. Virginia's property tax system varies significantly by jurisdiction—Fairfax County's effective rate of about 1.03% is higher than many Maryland counties, while rural Virginia areas are much lower. Maryland's rates average about 0.99% statewide but can reach 1.10% in some counties. Car taxes are another Virginia cost: the state levies a personal property tax on vehicles, which can add $500-$1,500 per year depending on the car's value. Maryland has no such tax. The bottom line depends heavily on which specific counties you're comparing and whether you drive expensive vehicles.
Key Differences Beyond Income Tax
| Category | Virginia | Maryland |
|---|---|---|
| Income Tax Structure | State rate 2%-5.75% PLUS county income tax of 2.25%-3.20%; combined top rate up to 8.95% | State rate 2%-5.75%; no local income tax; effective near-flat for most earners above $17K |
| Property Tax | Effective rate ~0.99%; varies by county; homestead credit limits assessment increases | Effective rate ~0.93% statewide; Fairfax ~1.03%; significant variation across jurisdictions |
| Vehicle/Personal Property Tax | No personal property tax on vehicles | Annual vehicle property tax based on assessed value; can be $500-$1,500+ per car |
| Sales Tax | Flat 6% statewide; no local additions | Base rate 4.3%, combined up to 7% in some areas; groceries taxed at reduced 1% rate |
| Retirement Income | Social Security exempt; pension exclusion up to $36,200 for those 65+; 401k/IRA taxed at full rates | Social Security exempt; age 65+ deduction of $12,000; military pensions fully exempt |
Who Benefits from Moving?
Federal workers choosing between MD and VA suburbs
A GS-14 federal employee earning $130,000 pays roughly $10,000 in Maryland combined state/county tax (Montgomery County) versus $7,100 in Virginia state tax (Fairfax County). That $2,900 gap is partially offset by Virginia's vehicle property tax if you own two cars (~$1,500), leaving a net advantage of about $1,400 for Virginia.
Government contractors earning $200K+
At $200,000 income, the Maryland county tax surcharge adds roughly $4,500-$6,400 compared to Virginia (depending on county). This is one of the few metro areas where a 20-minute move can save $5,000+ per year in taxes without changing jobs.
Military families stationed at DC-area bases
Virginia fully exempts military retirement pay from state income tax, while Maryland offers a limited exemption. For a retired military officer with a $60,000 pension, this difference alone is worth $3,000/year in Virginia's favor.
Bottom line: At $150,000 income, Virginia saves roughly $3,300 over Maryland's Montgomery County—one of the most impactful same-metro tax moves for DC-area professionals.
Tax at Different Income Levels
| Income | Virginia Total Tax | Maryland Total Tax | Annual Savings |
|---|---|---|---|
| $75,000 | $16,836 | $16,448 | Save $388 |
| $100,000 | $25,686 | $25,048 | Save $638 |
| $150,000 | $44,004 | $42,975 | Save $1,029 |
| $200,000 | $61,222 | $60,029 | Save $1,193 |
Based on single filer, standard deduction, 2025 tax year. Includes federal income tax, state income tax, and FICA.
Why the difference
You'd save $638/year ($53/month) in Maryland vs Virginia.
Tax structure
Virginia uses progressive brackets up to 5.8%, while Maryland uses progressive brackets up to 5.8%.
Effective rate at your income
At $100,000, Maryland's effective state rate is 3.9% vs 4.6% in Virginia — a 0.6 percentage point gap.
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: 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.
Understanding Each State
Virginia
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.
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.
Key Comparison Points
Income tax structure: Virginia has a progressive income tax (2% – 5.75%), while Maryland has a progressive income tax (2% – 5.75%).
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 Virginia or Maryland?
Based on income tax alone, Maryland has a lower tax burden. At $100K income, you'd save $638 annually in Maryland compared to Virginia. However, total cost of living also depends on property taxes, sales taxes, and housing costs.
How much would I save moving from Virginia to Maryland?
A single filer earning $100,000 would save approximately $638 per year in total taxes by living in Maryland instead of Virginia. At $150,000 income, the savings change to $1,029 per year.
What is the income tax rate in Virginia?
Virginia has a progressive income tax with rates of 2% – 5.75%.
What is the income tax rate in Maryland?
Maryland has a progressive income tax with rates of 2% – 5.75%.