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HEAD-TO-HEAD TAX COMPARISON · 2026

COUNTRY A New Jersey VS COUNTRY B Maryland

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

Daniel · CountryTaxCalc Updated October 2026 Income tax verified October 2026 Tax Comparison 2026
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OVERVIEW
New Jersey's income tax is meaningfully cheaper than Maryland's blended state-plus-county tax — the Maryland figures here add a county income tax at a representative 3.2% of Maryland taxable net income, the 2026 rate in Montgomery, Baltimore City and County, Howard, Prince George's and several other counties (the real range is 2.25%-3.3% by county, so your own county's bill may be somewhat lower or higher). At $100,000 income, New Jersey's state tax bill ($4,180) is $3,193/year lower than Maryland's combined state-plus-county bill ($7,373: $4,384 state plus $2,989 county), and the gap widens to $6,729/year at $250,000. But New Jersey's income-tax advantage comes with a major trade-off: New Jersey has the highest average property tax bill in the entire United States (average effective rate of about 1.88%, tied for #1 nationally with Illinois), while Maryland's average effective property tax rate is roughly 0.92% — meaningfully lower. On a typical $400,000 home, that's about $7,520/year in New Jersey property tax versus $3,680/year in Maryland, a $3,840/year gap that still exceeds New Jersey's income-tax savings at $100,000 income ($3,193/year). In other words: renters and lower-income earners in New Jersey may come out ahead of Maryland, but New Jersey homeowners at $100,000 income with a $400,000 home actually pay slightly more in total state tax than Maryland residents ($11,700 vs $11,053) once property tax is included — New Jersey only pulls ahead around $127,000 income, where the income-tax gap grows large enough to outweigh the property-tax gap. On retirement income, New Jersey fully exempts Social Security and offers a substantial pension/retirement income exclusion for residents 62 and older with total income under $150,000, while Maryland also fully exempts Social Security and offers a pension exclusion of up to $41,200 (tax year 2025) for residents 65 or older or totally disabled, reduced by Social Security received and not available for IRA distributions.
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
New Jersey
TAX RATE
1.4-10.75%
7-Bracket Progressive

7 progressive brackets from 1.4% to 10.75% (top rate applies over $1M); no local income tax anywhere in the state

🦀
COUNTRY B
Maryland
TAX RATE
2-6.5% + County
10-Bracket Progressive + County Tax

10 state brackets (2-6.5%) plus a mandatory county income tax (2.25-3.3% of Maryland taxable net income by county; this page illustrates a 3.2% county rate)

TYPICAL ANNUAL DIFFERENCE
Moving from Maryland → New Jersey at $100,000
$3,193

That's $266/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
🏙️ NJ TAX
🦀 MD TAX
SAVINGS
10-YEAR
$50,000
$1,215
$3,398
$2,183
$21,830
$75,000
$2,596
$5,385
$2,789
$27,890
$100,000
$4,180
$7,373
$3,193
$31,930
$150,000
$7,365
$11,705
$4,340
$43,400
$250,000
$13,735
$20,464
$6,729
$67,290
💡

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🏙️

New Jersey Pros & Cons

+ PROS
  • Income tax beats Maryland's combined state-plus-county burden at every income level shown — saving $2,183 to $6,729/year
  • No local income tax anywhere in New Jersey, unlike Maryland where every resident also owes a mandatory county income tax of 2.25-3.3% by county
  • Social Security fully exempt at any income level, plus a pension/retirement income exclusion for residents 62+ with total income under $150,000
  • Zero sales tax on clothing and most groceries, plus proximity to both New York City and Philadelphia job markets without either city's local income tax
− CONS
  • Highest average property tax bill in the nation — roughly 1.88% effective rate (tied #1 with Illinois), versus Maryland's roughly 0.92% average
  • On a $400,000 home, New Jersey's property tax premium (about $3,840/year more than Maryland) actually exceeds the income-tax savings at $100,000 income, making Maryland cheaper overall for homeowners at that income level
  • Top marginal rate of 10.75% (over $1,000,000) is one of the highest state income tax rates in the country
  • High overall cost of living, especially in North Jersey commuter counties near New York City
🦀

Maryland Pros & Cons

+ PROS
  • Average property tax (~0.92%) is meaningfully lower than New Jersey's — on a $400,000 home, that's about $3,840/year less
  • For homeowners at $100,000 income or below, Maryland's lower property tax more than offsets its higher income tax — Maryland residents can pay less in total state tax than New Jersey homeowners at these levels
  • Deep federal-government, biotech, and defense-contractor job market in the DC suburbs (NIH, Johns Hopkins, federal agencies)
  • Pension exclusion of up to $41,200 (tax year 2025) for residents 65+ or totally disabled, plus Social Security fully exempt at any income level
− CONS
  • Mandatory county income tax (2.25-3.3% of Maryland taxable net income depending on county; this page illustrates 3.2%) stacks on top of the state's 10-bracket structure, a two-tier system unique among states, costing $2,183 to $6,729/year more than New Jersey across the incomes shown
  • Pension exclusion does not cover IRA distributions and shrinks dollar for dollar with Social Security received; other retirement income is taxed at state plus county rates
  • Top combined state+county rate reaches roughly 9.8% (the 6.5% state rate on income over $1 million plus up to 3.3% county); most earners under $500,000 face a top state rate of 5.75% (6.25% from $500,000), or about 9.05% combined with a 3.3% county, among the highest combined rates in the region
  • Tax complexity is higher: total tax bill depends on both the 10 state brackets and which of Maryland's 24 counties (or Baltimore City) you live in
FAQ

Frequently Asked Questions

Is New Jersey or Maryland cheaper for state income tax?

New Jersey is cheaper at every income level shown. At $100,000, New Jersey's income tax costs $4,180 versus Maryland's combined state-plus-county tax at $7,373 — a $3,193/year difference. The gap widens to $6,729/year at $250,000 because Maryland's mandatory county tax (illustrated here at 3.2%) adds to its already-progressive state brackets.

Does New Jersey's high property tax cancel out its income-tax advantage?

For homeowners, yes — and at $100,000 income it more than cancels it out. New Jersey has the highest average property tax in the nation (~1.88% effective rate) versus Maryland's ~0.92%. On a $400,000 home, that's roughly $3,840/year more in New Jersey — which actually exceeds the $3,193/year income-tax savings at $100,000 income, making Maryland homeowners slightly cheaper overall at that income level ($11,053 vs $11,700). Renters, however, see none of this property-tax offset and come out ahead in New Jersey at every income level.

What is Maryland's county income tax, and does everyone pay it?

Yes. Every Maryland resident pays a mandatory county (or Baltimore City) income tax on top of the state rate, set at 2.25% to 3.3% of Maryland taxable net income depending on where they live (Anne Arundel and Frederick use graduated county rates). The $7,373 figure at $100,000 income reflects a representative 3.2% county rate ($2,989 of county tax on $83,900 of Maryland taxable net income, plus $4,384 state), the rate charged in Montgomery, Baltimore City and County, Howard, Prince George's and several other counties; your own county may be lower (Worcester charges the lowest at 2.25%) or slightly higher (Dorchester and Kent at 3.3%). New Jersey has no equivalent local income tax anywhere.

Which state has lower property tax, New Jersey or Maryland?

Maryland has the lower average effective property tax rate at roughly 0.92%, compared to New Jersey's roughly 1.88% — the highest average in the United States, tied with Illinois. On a $400,000 home, that's about $3,680/year in Maryland versus $7,520/year in New Jersey, a difference of about $3,840/year in Maryland's favor.

Does either state tax Social Security and retirement income?

New Jersey fully exempts Social Security at any income level and offers a pension/retirement income exclusion for residents 62 or older with total income under $150,000. Maryland also fully exempts Social Security and offers a pension exclusion of up to $41,200 (tax year 2025) for residents 65 or older or totally disabled, reduced by Social Security received and not available for IRA distributions. Which state is better depends on your income sources and total income.

How much would I save moving from Maryland to New Jersey?

At $100,000 income, moving from Maryland to New Jersey could save about $3,193/year in state and local income tax. But if you're buying a comparable home, New Jersey's higher property tax (roughly $3,840/year more on a $400,000 home) actually exceeds that savings — meaning a New Jersey homeowner at this income and home value would end up paying more in total state tax than staying in Maryland. New Jersey's net advantage returns around $127,000 income, where the income-tax savings outweigh the property-tax gap.

How do capital gains get taxed in New Jersey versus Maryland?

Neither state offers a preferential rate for capital gains — both New Jersey and Maryland tax capital gains as ordinary income at their regular state (and, in Maryland's case, state-plus-county) rates. There is no long-term capital gains discount in either state, unlike the federal system.

Are New Jersey and Maryland both expensive states for federal employees and commuters?

Both states have significant commuter populations — New Jersey into New York City and Philadelphia, Maryland into Washington, DC. Neither state's income tax depends on where you work, only where you live, so the comparisons above apply regardless of which metro area you commute into.

Why is Maryland's tax system considered more complex than New Jersey's?

Maryland layers 10 separate state income-tax brackets (2% to 6.5%) on top of a mandatory county tax that varies by jurisdiction (2.25%-3.3%), so your total rate depends on both your income and which of Maryland's 24 counties (or Baltimore City) you live in. New Jersey's 7-bracket structure applies uniformly statewide with no local add-on.
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