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HEAD-TO-HEAD TAX COMPARISON · 2026

COUNTRY A Maryland VS COUNTRY B Tennessee

Side-by-side analysis of income tax, effective rates, and take-home pay for Maryland and Tennessee in 2026.

Daniel · CountryTaxCalc Updated August 2026 Tax Comparison 2026
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OVERVIEW
Maryland taxes income through a 10-bracket progressive schedule running from 2% on the first $1,000 up to 6.5% on taxable income above $1,000,000 (single filer), following two new top brackets — 6.25% above $500,000 and 6.5% above $1,000,000 — added by the Budget Reconciliation and Financing Act of 2025. On top of the state rate, every Maryland resident also owes a mandatory county 'piggyback' income tax that ranges from 2.25% to 3.3% depending on county of residence, which can push the effective combined rate close to 9% for high earners in counties like Montgomery. Tennessee charges 0% state income tax — the Hall Income Tax on interest and dividends was fully repealed effective January 1, 2021, so Tennessee levies no personal income tax on wages, salaries, retirement, or investment income of any kind. The figures in this comparison use Maryland's state-only brackets (not county tax), since county rates vary by jurisdiction and Montgomery County's structure was itself restructured mid-2026 — see the FAQ below for the full methodology and how much more the county add-on typically costs. At $100,000 in state-only taxable income, Maryland's brackets produce $4,698 in state tax versus $0 in Tennessee — a savings of $4,698/year, before factoring in county tax. Add the typical 2.25%-3.3% county rate and total Maryland income tax liability at $100,000 runs roughly $2,250-$3,300 higher still. Tennessee's tradeoff is its sales tax: at 9.61% average combined state-and-local, it's the highest in the nation, and unlike most no-income-tax states, Tennessee also taxes groceries (at a reduced 4% state rate).
Section 01

The Big Picture

Top-line rates and effective take-home for a typical earner — including income tax, social contributions, and applicable surcharges.

🦀
COUNTRY A
Maryland
TAX RATE
2-6.5%
State Rate (+ County Tax)

10-bracket state tax from 2% to 6.5%, plus a mandatory county 'piggyback' tax of 2.25%-3.3%

🎸
COUNTRY B
Tennessee
TAX RATE
0%
No Income Tax

0% income tax, funded by the nation's highest average combined sales tax

TYPICAL ANNUAL DIFFERENCE
Moving from Tennessee → Maryland at $100,000
$4,698

That's $392/month back in your pocket

Section 02

Tax Savings by Income Level

Net take-home after all income tax, social contributions, and surcharges — for a single employee with no dependents.

GROSS INCOME
🦀 MD TAX
🎸 TN TAX
SAVINGS
10-YEAR
$50,000
$2,323 (4.6% eff., state-only)
$0 (0%)
Tennessee saves $2,323+
$23,230
$100,000
$4,698 (4.7% eff., state-only)
$0 (0%)
Tennessee saves $4,698+
$46,980
$200,000
$10,010 (5.0% eff., state-only)
$0 (0%)
Tennessee saves $10,010+
$100,100
$500,000
$27,135 (5.4% eff., state-only)
$0 (0%)
Tennessee saves $27,135+
$271,350
💡

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🦀

Maryland Pros & Cons

+ PROS
  • DC/Baltimore corridor access: Proximity to federal government jobs, biotech (Rockville, Gaithersburg), and Johns Hopkins-anchored healthcare and research
  • Top-ranked public schools: Montgomery and Howard counties consistently rank among the best school districts in the country
  • Chesapeake Bay lifestyle: Waterfront access, seafood, and Ocean City beaches within driving distance
  • Dense healthcare infrastructure: A high concentration of specialists and top hospital systems per capita
  • Federal employee-friendly: A large share of the workforce works in or near DC, with strong locality pay
− CONS
  • State income tax up to 6.5%, plus mandatory county tax: The 2025 Budget Reconciliation and Financing Act added new 6.25%/6.5% top brackets; county piggyback tax (2.25%-3.3%) applies on top of every bracket
  • High cost of living: Housing in the DC/Baltimore corridor runs well above the national average
  • Above-average property taxes: ~0.92% average effective rate
  • Traffic congestion: I-270, I-95, and Capital Beltway corridors are among the most congested in the country
  • County tax rates are not uniform: Your actual rate depends on which of Maryland's 23 counties (or Baltimore City) you live in, adding complexity to tax planning
🎸

Tennessee Pros & Cons

+ PROS
  • Zero state income tax: No tax on wages, salaries, retirement income, or investment gains since the Hall Tax's full repeal in 2021
  • Low property taxes: ~0.52% average effective rate, well below Maryland's
  • Nashville's booming economy: Healthcare, music/entertainment, and a fast-growing tech and logistics sector
  • Simpler tax filing: No state or county income tax return required at all
  • Lower overall cost of living than Maryland, especially housing
− CONS
  • Highest combined sales tax in the US: ~9.61% average combined state and local rate
  • Groceries are taxed: A reduced 4% state rate applies to food, plus local tax, unlike most other no-income-tax states
  • Fewer federal government and biotech-anchored jobs concentrated in one metro area
  • Hot, humid summers: A significant adjustment for those used to the Mid-Atlantic climate
  • Distance from Mid-Atlantic family and professional networks: A long move for most Maryland residents
FAQ

Frequently Asked Questions

How much will I save moving from Maryland to Tennessee?

At $100,000 in taxable income, Maryland's state-only brackets produce $4,698 in state income tax versus $0 in Tennessee — a savings of at least $4,698/year, or about $392/month. Add Maryland's mandatory county piggyback tax (2.25%-3.3% depending on county), and total savings typically run $6,900-$8,000/year at this income level. At $500,000, state-only savings alone reach $27,135/year.

What are Maryland's income tax brackets for 2026?

Maryland uses 10 progressive state brackets for single filers: 2% up to $1,000; 3% from $1,000-$2,000; 4% from $2,000-$3,000; 4.75% from $3,000-$100,000; 5% from $100,000-$125,000; 5.25% from $125,000-$150,000; 5.5% from $150,000-$250,000; 5.75% from $250,000-$500,000; 6.25% from $500,000-$1,000,000; and 6.5% above $1,000,000. The two top brackets (6.25% and 6.5%) were added by the Budget Reconciliation and Financing Act of 2025, signed May 27, 2025 and effective for tax years beginning after December 31, 2024, per the Comptroller of Maryland.

Why does this comparison use Maryland's state-only tax rate instead of including county tax?

Every Maryland resident owes a mandatory county 'piggyback' income tax in addition to the state rate, ranging from 2.25% (Somerset County) to 3.3% (Montgomery County and Baltimore City) depending on where you live. Because this rate varies by county — and Montgomery County restructured its local rate into a new progressive schedule in 2026 — this comparison uses Maryland's state-only brackets as the headline figure for a consistent, defensible baseline, and clearly discloses that actual total Maryland tax liability runs roughly $2,250-$3,300 higher per $100,000 of income once county tax is added. Check your specific county's current rate with the Comptroller of Maryland before estimating your own total liability.

How do property taxes compare between Maryland and Tennessee?

Maryland's average effective property tax rate is about 0.92% of home value — on a $500,000 home, roughly $4,600/year. Tennessee's average effective rate is about 0.52%, or roughly $2,600/year on the same home, per Tax Foundation data.

Does Tennessee really have no income tax at all?

Yes. Tennessee's only historical income tax — the Hall Income Tax on interest and dividend income — was phased out one percentage point per year starting in 2016 and fully repealed effective January 1, 2021. Since then, Tennessee has levied no personal income tax on any form of income, per the Tennessee Department of Revenue. It funds government primarily through sales tax, which combines for the highest average rate in the nation at 9.61%.

Should I move from Maryland to Tennessee to save on taxes?

It depends on your county of residence and income level. Maryland residents in high-piggyback-tax counties like Montgomery or Baltimore City see the largest combined savings — often $7,000-$9,000/year at $100,000 income once county tax is included. High earners above $500,000, who face Maryland's new 6.25%/6.5% top brackets, see the largest dollar savings overall. Remote workers, retirees, and business owners who don't need daily proximity to DC/Baltimore tend to benefit the most from a move to Tennessee.
From the brief
NL27%new 2027 rate, down from 30%
DK65.4kkr/mo threshold, cut from 78k
MT1940snon-dom regime unchanged since
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