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January 11, 2022
2022-0056

Maryland law allows counties to raise their income tax rates and apply income tax brackets; 2022 county income tax rates now available

Under HB 319 and effective January 1, 2022, each Maryland county is authorized to set, by ordinance or resolution, a county income tax rate equal to at least 2.25%, from the previous 1%. The Maryland legislature overrode Governor Larry Hogan's veto of this bill on December 6, 2021.

HB 319 also allows each county to apply its income tax on a bracket basis with the following restrictions.

  • The county must set, by ordinance or resolution, the income brackets that apply to each income tax rate.
  • The county may set income brackets that differ from the income brackets to which the state income tax applies.
  • The county may not set a minimum income tax rate less than 2.25% of an individual's Maryland taxable income.
  • The county may not apply an income tax rate to a higher income bracket that is less than the income tax rate applied to a lower income bracket.

The current Maryland county income tax rates for 2022, available here, reflect rate decreases for St. Mary's and Washington counties. The remainder of the county income tax rates are currently unchanged from 2021.

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Contact Information
For additional information concerning this Alert, please contact:
 
Workforce Tax Services - Employment Tax Advisory Services
   • Kristie Lowery (kristie.lowery@ey.com)
   • Kenneth Hausser (kenneth.hausser@ey.com)
   • Debera Salam (debera.salam@ey.com)

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