New York’s tax reputation is driven almost entirely by New York City’s city income tax of up to 3.876% on top of the state rate. For upstate New York residents (Albany, Buffalo, Rochester), the state-only rate is actually lower than Maryland’s combined state plus county burden at most income levels. At $100,000, New York state saves $2,957 vs Maryland’s combined rate. However, NYC residents face a combined rate of up to 14.776% — making New York City by far the more expensive option. Maryland’s mandatory county income tax (2.25–3.2%) means all Maryland residents pay a combined rate, while only NYC residents face New York’s city tax surcharge.

By Daniel, Founder of CountryTaxCalc

Daniel has spent 5+ years researching tax systems across 95+ countries and all US states to make tax comparison accessible to everyone. For corrections, contact us.

Last Updated: April 2026

The Big Picture

🏙️ New York

Up to 10.9%

Progressive (+ NYC up to 3.876%)

State rates 4–10.9%; NYC residents add up to 3.876% city tax (combined up to 14.776%); upstate NY far lower in practice

🦀 Maryland

Up to 5.75%

State + County (up to ~9.45%)

State 2–5.75% + mandatory county income tax 2.25–3.2%; combined up to ~8.95% for high earners in high-rate counties

Typical Annual Savings

At $100,000 income:

$2,957

That is $246/month back in your pocket!

Tax Savings by Income Level

IncomeNY TaxMD TaxSavings10-Year
$50,000 $2,697$4,355$1,658$16,580
$75,000 $4,346$6,653$2,307$23,070
$100,000 $5,994$8,951$2,957$29,570
$150,000 $10,222$13,546$3,324$33,240
$250,000 $22,097$22,736$639$6,390
$500,000 $48,772$45,961$0 (MD cheaper by $2,811)$28,110
💡

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New York Pros and Cons

✅ Pros

  • Lower state-only rate than Maryland up to ~$250K: New York’s state income tax, without the NYC city surcharge, is lower than Maryland’s state plus county combined rate for most earners — saving $1,658–$3,324/year at $50K–$150K
  • Higher estate tax exemption: New York’s estate tax exemption ($6.94M in 2026) exceeds Maryland’s ($5M), offering better protection for affluent families; however NY’s notorious “cliff” means estates just above the threshold face tax on the full value
  • World-class metro amenities: New York City’s economy, cultural institutions, and global connectivity are unmatched; even upstate metros (Albany, Buffalo) benefit from proximity to NYC markets and the Hudson Valley
  • No county income tax outside NYC: Upstate New York residents pay state income tax only — no mandatory county income tax layer, unlike Maryland where county tax is unavoidable for all residents

❌ Cons

  • NYC city tax creates massive burden for city residents: New York City adds up to 3.876% on top of the state rate — combined up to 14.776%; NYC residents at $100,000 pay approximately $9,870 combined vs Maryland’s $8,951; at $500,000 the combined NY+NYC rate dwarfs Maryland
  • Very high property tax: New York’s effective property tax rate ~1.72% is the highest in the Northeast and well above Maryland’s ~1.09%; on a $450,000 home, approximately $2,835/year more than Maryland
  • New York estate tax cliff: estates valued just above the $6.94M exemption threshold face tax on the entire estate value, not just the excess — creating a punishing marginal effect unique to New York
  • High cost of living: New York City and suburban NYC counties (Westchester, Nassau, Suffolk) are among the most expensive places to live in the US; high housing, transportation, and service costs compound the tax burden

Maryland Pros and Cons

✅ Pros

  • Competitive combined rate outside Baltimore City: Maryland’s suburban counties (Montgomery, Howard, Anne Arundel) have moderate combined rates of 7.75–8.75% — lower than NYC-area New York; strong federal government employment creates stable, high-income jobs
  • Lower property tax than New York: Maryland’s effective rate ~1.09% is significantly below New York’s ~1.72%; on a $500,000 home, approximately $3,150/year less; major advantage for homeowners in DC suburbs
  • DC suburb advantage: proximity to Washington DC government, federal contractors, NIH, and defense industry provides a unique high-income employment base unavailable in most states; many Maryland residents work in DC tax-free
  • Estate tax exemption at $5M: Maryland’s $5M estate tax exemption (with a flat 16% rate) is predictable and lacks New York’s cliff effect; better for estates in the $5–10M range

❌ Cons

  • Mandatory county income tax for all residents: all Maryland residents pay both state and county income tax — there is no county-free option as exists in upstate New York; combined rates range 4.75–8.95% depending on county
  • Higher combined rate than upstate NY at most incomes: Maryland’s state plus county rate exceeds New York’s state-only rate by $1,658–3,324/year at $50K–$150K; only NYC residents pay more than Maryland’s combined burden
  • Baltimore City challenges: Baltimore carries high crime rates, population decline, and above-average county income tax (3.2% city rate) — the highest county rate in Maryland; quality-of-life concerns affect residential appeal
  • Estate tax at $5M threshold: Maryland’s lower $5M exemption captures more estates than New York’s $6.94M threshold; families with estates in the $5–6.9M range face Maryland estate tax but not New York’s

Frequently Asked Questions

Q: Is New York state actually cheaper than Maryland for income tax?

Yes — for residents outside New York City. New York’s state-only income tax is lower than Maryland’s combined state plus county rate at incomes between $50,000 and $250,000, saving $639–$3,324/year. At $500,000, Maryland becomes slightly cheaper ($2,811/year). The critical distinction: all Maryland residents pay county income tax (unavoidable, 2.25–3.2%), while only New York City residents pay the city surcharge. Upstate New Yorkers in Albany or Buffalo pay state tax only — a genuinely lower burden than Maryland’s combined rate.

Q: How much do NYC residents actually pay in income tax?

New York City residents pay both New York state income tax and NYC city income tax. Combined rates reach up to 14.776% for the highest earners (10.9% state + 3.876% NYC). At $100,000 income: approximately $5,994 NY state + $3,876 NYC city = $9,870 combined. At $250,000: approximately $22,097 state + estimated $9,690 NYC = $31,787 combined. This makes NYC residents among the highest-taxed workers of any US city, substantially exceeding Maryland’s combined rate of approximately $22,736 at $250,000.

Q: What is Maryland’s county income tax and how does it work?

Maryland requires all residents to pay both state income tax (2–5.75%) and a mandatory county income tax set by each county. County rates range from 2.25% (several counties) to 3.2% (Baltimore City, Howard County at 3.2%). Montgomery County charges 3.2%, Prince George’s 3.2%, Anne Arundel 2.81%, Baltimore County 2.83%. The county tax is withheld alongside state tax and filed together. There is no option to avoid county income tax as a Maryland resident. Combined effective rates for most Maryland residents range from 7.25% to 8.95% depending on county and income level.

Q: Is Maryland or New York better for high earners?

For high earners, it depends entirely on location. High earners in upstate New York (Albany, Buffalo, Syracuse) pay state income tax only — significantly less than Maryland at $500,000 (where NY state = $48,772 vs MD combined = $45,961, making Maryland slightly cheaper). High earners in New York City face combined state + city rates of up to 14.776% — far exceeding Maryland. Maryland is better for high earners working in DC suburbs, where federal government salaries, contractor pay, and NIH/defense roles provide higher incomes with a more moderate combined tax rate than NYC.

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