Maryland and Virginia taxes
Apr. 21st, 2004 12:09 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
winterbadgerSomeone was asking for a MD/VA comparison.
The following is from a retirement planning site, but the info is applicable to nonretired people too. Also see this article from the Washington Business Journal. http://washington.bizjournals.com/washington/stories/2003/08/04/focus9.html
MARYLAND
Sales Taxes
State Sales Tax: 5.0% (food, prescription and non-prescription drugs exempt)
Gasoline Tax: 23.5 cents/gallon
Diesel Fuel Tax: 24.25 cents/gallon
Gasohol Tax: 23.5 cents/gallon
Personal Income Taxes
Tax Rate Range: Low - 2%; High - 4.75%; Maryland counties and Baltimore City may levy an income tax ranging from 1.25% to 3.15% of taxable income. Click here for local rates.
Income Brackets: Lowest - $1,000; Highest - $3,000
Number of Brackets: 4
Personal Exemptions: Single - $2,400; Married - $4,800; Dependents - $2,400
Additional Exemptions: 65 or older - $2,400 each personal and dependent
Standard Deduction: $1,500 or 15% of Maryland adjusted gross income to maximum of $3,000 for single returns; $2,000 to $4,000 for married filing jointly.
Medical/Dental Deduction: Federal amount
Federal Income Tax Deduction: None
Retirement Income Taxes: Social Security and Railroad Retirement income are exempt. Pensions are exempt up to $17,300, minus amount of Social Security received and Railroad Retirement benefits. Out-of-state government pensions do not qualify for the exemption. Military pensioners are eligible for an additional pension exemption of up to $2,500. To qualify they must have a federal adjusted gross income of $22,500 or less. Click here for details.
Retired Military Pay: Up to $2,500 may be exempt if retiree is over 55 and meets gross income limit. Some retirement pay may be excluded for those 65 and older or totally disabled. Survivor benefits are taxable. Click here for details.
Military Disability Retired Pay: Disability Portion - Length of Service Pay; Member on September 24, 1975 - No tax; Not Member on September 24, 1975 - Taxed, unless combat incurred. Retired Pay - Based solely on disability: Member on September 24, 1975 - No tax; Not Member on September 24, 1975 - Taxed, unless all pay based on disability and disability resulted from armed conflict, extra-hazardous service, simulated war, or an instrumentality of war.
VA Disability Dependency and Indemnity Compensation: Not subject to federal or state taxes
Military SBP/SSBP/RCSBP/RSFPP: Generally subject to state taxes for those states with income tax. Check with state department of revenue office.
Property Taxes
Property tax rates vary widely. No restrictions or limitations on property taxes are imposed by the state, meaning cities and counties can set tax rates at the level they deem necessary to fund governmental services. These rates can increase, decrease or remain the same from year to year.
The Homeowners' Property Tax Credit Program (circuit breaker) allows credits against the homeowner's property tax bill if the property taxes exceed a fixed percentage of the person's gross income. In other words, it sets a limit on the amount of property taxes any homeowner must pay based upon his or her income. The plan was called circuit breaker because it shut off the property tax at a certain point just like an electric circuit breaker shuts off the current when the circuit becomes overloaded. It provides annual property tax credits to homeowners who qualify by reason of income. It has no relationship to age. To be eligible, a person must own their property, live in it for at least six months a year, and have a net worth, not including the value of the property on which you are seeking the credit, of less than $200,000. The tax credit is based upon the amount by which the property taxes exceed a percentage of your income according to the following formula: 0% of the first $4,000 of the combined household income; 1.0% of the next $4,000 of income; 4.5% of the next $4,000 of income; 6.5% of the next $4,000 of income; and 9% of all income above $16,000.
A property tax deferral program allows property owners 65 or over to defer the increase in their property tax bill. Local governments must approve the program. The deferred taxes become a lien on the property and must be repaid when the property is transferred. For details on property taxes, click here.
Inheritance and Estate Taxes
Maryland collects an inheritance tax. Property passing to a spouse, child or other lineal descendent, spouse of a child or other lineal descendant, parent, grandparent or sibling, is exempt from taxation. Property passing to other individuals is subject to a 10% tax rate. The estate tax is limited to federal estate tax collection. For more information on inheritance taxes click here. For estate tax information, click here.
For further information, visit the Maryland Comptroller of the Treasury site.
VIRGINIA
Sales Taxes
State Sales Tax: 4.5% (includes statewide local tax of 1%) (prescription and non-prescription drugs exempt, 3.0% on food); 4.0% on food for home consumption; local option tax adds 1%.
Gasoline Tax: 17.5 cents/gallon
Diesel Fuel Tax: 16.0 cents/gallon
Gasohol Tax: 17.5 cents/gallon
(Local option tax adds 2% to fuel tax)
Personal Income Taxes
Tax Rate Range: Low - 2.0%; High - 5.75%
Income Brackets: Lowest - $3,000; Highest - $17,000
Number of Brackets: 4
Personal Exemptions: Single - $800; Married - $1,600; Dependents - $800
Standard Deduction: Single - $3,000; Married filing jointly - $5,000
Medical/Dental Deduction: Partial
Federal Income Tax Deduction: None
Retirement Income Taxes: Social Security is exempt. Taxpayers 62 to 64 years old qualify for a $6,000 exemption from any income source and those age 65 or older qualify for a $12,000 exemption from any income source. Tier 2 and other Railroad Retirement and Railroad Unemployment Benefits are deductible, as is retirement plan income previously taxed by another state.
Retired Military Pay: Follows federal tax rules. Military retirement income received by those awarded the Medal of Honor can be subtracted from federal gross income for tax purposes.
Military Disability Retired Pay: Disability Portion - Length of Service Pay; Member on September 24, 1975 - No tax; Not Member on September 24, 1975 - Taxed, unless combat incurred. Retired Pay - Based solely on disability: Member on September 24, 1975 - No tax; Not Member on September 24, 1975 - Taxed, unless all pay based on disability and disability resulted from armed conflict, extra-hazardous service, simulated war, or an instrumentality of war.
VA Disability Dependency and Indemnity Compensation: Not subject to federal or state taxes
Military SBP/SSBP/RCSBP/RSFPP: Generally subject to state taxes for those states with income tax. Check with state department of revenue office.
Property Taxes
Property taxes are administered by the state's cities, counties and towns and are based on 100% of fair market value. Local tax officials should be contacted. There are no adjustments at the state level.
Inheritance and Estate Taxes
There is no inheritance and the estate tax is limited and related to federal estate tax collection.
The following is from a retirement planning site, but the info is applicable to nonretired people too. Also see this article from the Washington Business Journal. http://washington.bizjournals.com/washington/stories/2003/08/04/focus9.html
MARYLAND
Sales Taxes
State Sales Tax: 5.0% (food, prescription and non-prescription drugs exempt)
Gasoline Tax: 23.5 cents/gallon
Diesel Fuel Tax: 24.25 cents/gallon
Gasohol Tax: 23.5 cents/gallon
Personal Income Taxes
Tax Rate Range: Low - 2%; High - 4.75%; Maryland counties and Baltimore City may levy an income tax ranging from 1.25% to 3.15% of taxable income. Click here for local rates.
Income Brackets: Lowest - $1,000; Highest - $3,000
Number of Brackets: 4
Personal Exemptions: Single - $2,400; Married - $4,800; Dependents - $2,400
Additional Exemptions: 65 or older - $2,400 each personal and dependent
Standard Deduction: $1,500 or 15% of Maryland adjusted gross income to maximum of $3,000 for single returns; $2,000 to $4,000 for married filing jointly.
Medical/Dental Deduction: Federal amount
Federal Income Tax Deduction: None
Retirement Income Taxes: Social Security and Railroad Retirement income are exempt. Pensions are exempt up to $17,300, minus amount of Social Security received and Railroad Retirement benefits. Out-of-state government pensions do not qualify for the exemption. Military pensioners are eligible for an additional pension exemption of up to $2,500. To qualify they must have a federal adjusted gross income of $22,500 or less. Click here for details.
Retired Military Pay: Up to $2,500 may be exempt if retiree is over 55 and meets gross income limit. Some retirement pay may be excluded for those 65 and older or totally disabled. Survivor benefits are taxable. Click here for details.
Military Disability Retired Pay: Disability Portion - Length of Service Pay; Member on September 24, 1975 - No tax; Not Member on September 24, 1975 - Taxed, unless combat incurred. Retired Pay - Based solely on disability: Member on September 24, 1975 - No tax; Not Member on September 24, 1975 - Taxed, unless all pay based on disability and disability resulted from armed conflict, extra-hazardous service, simulated war, or an instrumentality of war.
VA Disability Dependency and Indemnity Compensation: Not subject to federal or state taxes
Military SBP/SSBP/RCSBP/RSFPP: Generally subject to state taxes for those states with income tax. Check with state department of revenue office.
Property Taxes
Property tax rates vary widely. No restrictions or limitations on property taxes are imposed by the state, meaning cities and counties can set tax rates at the level they deem necessary to fund governmental services. These rates can increase, decrease or remain the same from year to year.
The Homeowners' Property Tax Credit Program (circuit breaker) allows credits against the homeowner's property tax bill if the property taxes exceed a fixed percentage of the person's gross income. In other words, it sets a limit on the amount of property taxes any homeowner must pay based upon his or her income. The plan was called circuit breaker because it shut off the property tax at a certain point just like an electric circuit breaker shuts off the current when the circuit becomes overloaded. It provides annual property tax credits to homeowners who qualify by reason of income. It has no relationship to age. To be eligible, a person must own their property, live in it for at least six months a year, and have a net worth, not including the value of the property on which you are seeking the credit, of less than $200,000. The tax credit is based upon the amount by which the property taxes exceed a percentage of your income according to the following formula: 0% of the first $4,000 of the combined household income; 1.0% of the next $4,000 of income; 4.5% of the next $4,000 of income; 6.5% of the next $4,000 of income; and 9% of all income above $16,000.
A property tax deferral program allows property owners 65 or over to defer the increase in their property tax bill. Local governments must approve the program. The deferred taxes become a lien on the property and must be repaid when the property is transferred. For details on property taxes, click here.
Inheritance and Estate Taxes
Maryland collects an inheritance tax. Property passing to a spouse, child or other lineal descendent, spouse of a child or other lineal descendant, parent, grandparent or sibling, is exempt from taxation. Property passing to other individuals is subject to a 10% tax rate. The estate tax is limited to federal estate tax collection. For more information on inheritance taxes click here. For estate tax information, click here.
For further information, visit the Maryland Comptroller of the Treasury site.
VIRGINIA
Sales Taxes
State Sales Tax: 4.5% (includes statewide local tax of 1%) (prescription and non-prescription drugs exempt, 3.0% on food); 4.0% on food for home consumption; local option tax adds 1%.
Gasoline Tax: 17.5 cents/gallon
Diesel Fuel Tax: 16.0 cents/gallon
Gasohol Tax: 17.5 cents/gallon
(Local option tax adds 2% to fuel tax)
Personal Income Taxes
Tax Rate Range: Low - 2.0%; High - 5.75%
Income Brackets: Lowest - $3,000; Highest - $17,000
Number of Brackets: 4
Personal Exemptions: Single - $800; Married - $1,600; Dependents - $800
Standard Deduction: Single - $3,000; Married filing jointly - $5,000
Medical/Dental Deduction: Partial
Federal Income Tax Deduction: None
Retirement Income Taxes: Social Security is exempt. Taxpayers 62 to 64 years old qualify for a $6,000 exemption from any income source and those age 65 or older qualify for a $12,000 exemption from any income source. Tier 2 and other Railroad Retirement and Railroad Unemployment Benefits are deductible, as is retirement plan income previously taxed by another state.
Retired Military Pay: Follows federal tax rules. Military retirement income received by those awarded the Medal of Honor can be subtracted from federal gross income for tax purposes.
Military Disability Retired Pay: Disability Portion - Length of Service Pay; Member on September 24, 1975 - No tax; Not Member on September 24, 1975 - Taxed, unless combat incurred. Retired Pay - Based solely on disability: Member on September 24, 1975 - No tax; Not Member on September 24, 1975 - Taxed, unless all pay based on disability and disability resulted from armed conflict, extra-hazardous service, simulated war, or an instrumentality of war.
VA Disability Dependency and Indemnity Compensation: Not subject to federal or state taxes
Military SBP/SSBP/RCSBP/RSFPP: Generally subject to state taxes for those states with income tax. Check with state department of revenue office.
Property Taxes
Property taxes are administered by the state's cities, counties and towns and are based on 100% of fair market value. Local tax officials should be contacted. There are no adjustments at the state level.
Inheritance and Estate Taxes
There is no inheritance and the estate tax is limited and related to federal estate tax collection.
