When it comes to taxes levied, Maryland is on the higher end of the spectrum. The top individual income tax rate is 5.75%, yet many cities and counties also charge an additional income tax, which averages around 2.18%, according to The Tax Foundation.
As for estate and inheritance taxes, Maryland is the only state in the country to levy both. Estate taxes are paid on an estate before money is passed onto heirs. Maryland’s estate tax ranges from 0.80%-16%, with a $5 million exemption. On the flip side, if you inherit money, you will pay an inheritance tax based on the amount you individually are granted, ranging from 0% to 10%. Spouses and children, as well as other immediate family relationships, are exempt from this tax if they inherit. That said, no double taxation will take place. Whatever you owe in inheritance taxes is subtracted from the estate tax owed. If the inheritance tax is equal to the estate tax, no estate tax is due.