Insights

The enhanced senior deduction is a temporary federal income tax deduction of $6,000 per eligible person ($12,000 on a joint return if both spouses qualify) available for tax years 2025 through 2028. You qualify if you are 65 or older, have a valid Social Security number, and, if married, file jointly. It phases out at 6% of modified adjusted gross income above $75,000 single or $150,000 joint, and is available whether you itemize or take the standard deduction.

The short answer is: it depends on the type of retirement income. Maryland does tax some forms of retirement income, but also offers various exemptions and exclusions. In this comprehensive guide, we’ll break down how different types of retirement income are taxed in Maryland and provide insights to help you plan your retirement finances effectively.

If you’re 65 or older and live in Maryland, you may be eligible for a state tax credit worth up to $1,750 per year—whether or not you’re retired. The credit is based entirely on your age, residency, and income level. Combined with Maryland’s pension exclusion and full Social Security exemption, these three programs can reduce your state tax bill by 50–70% or more.

The numbers tell a concerning story: Many surviving spouses see their household income drop by 25-50%, yet find themselves paying higher tax rates on what remains. Medicare premiums can spike by thousands of dollars. And Social Security income that once supported two people must now sustain one.

Introduction If you’re approaching retirement or already retired, your tax picture has probably shifted more than once over the past decade. When the Tax Cuts and Jobs Act nearly doubled the standard deduction in 2018 and capped state and local tax (SALT) deductions at $10,000, millions of taxpayers — including many retirees — stopped itemizing…