Maryland does not tax SSDI benefits at the state level

Maryland exempts all Social Security Disability Insurance (SSDI) income from state income tax. This means you will not owe Maryland state tax on your SSDI payments, regardless of how much you receive or what other income you have. The exemption applies whether you file as a resident or non-resident.

This is a Maryland-specific rule. The federal government taxes SSDI under different rules — up to 85% of your benefits may be subject to federal income tax depending on your total income — but Maryland chose not to impose its own tax on these payments. If you live in Maryland and receive SSDI, you can exclude the full amount from your Maryland tax return.

The exemption does not mean you have no state tax obligation. If you have other income — wages, self-employment income, interest, pensions, or other sources — you still owe Maryland tax on those. SSDI is straightforward not part of the calculation.

Key Takeaways

  • Maryland excludes all SSDI income from state income tax, so you report zero SSDI on your Maryland return even if you owe federal tax on part of it.
  • Other income you receive — wages, pensions, investment income — is still taxable in Maryland and must be reported.
  • You may still need to file a Maryland return if your other income exceeds the filing threshold, even though your SSDI is not taxed.
  • The federal government and Maryland have separate tax rules; owing federal tax on SSDI does not mean you owe Maryland tax.

When you must file a Maryland return despite the SSDI exemption

Having SSDI does not automatically mean you skip filing a Maryland return. You must file if your other income — not including SSDI — meets Maryland's filing threshold. For the 2024 tax year, Maryland requires you to file if your gross income (excluding SSDI) is $15,000 or more for most filers, though the threshold varies by age and filing status.

Example: You receive $1,200 per month in SSDI and earn $500 per month from part-time work. Your SSDI ($14,400 annually) is not counted. Your work income ($6,000 annually) is below the threshold, so you would not be required to file a Maryland return. However, if you had $15,000 or more in wages or other non-SSDI income, you would need to file.

Even if you are not required to file, you may want to file anyway if you had taxes withheld from other income or if you are may have access to to a refundable credit. Maryland offers credits for property tax, rent, and dependent care that can result in a refund.

How federal and Maryland tax rules differ on SSDI

The federal government taxes SSDI based on your "combined income" — a calculation that includes half your SSDI plus all other income. If your combined income exceeds certain thresholds ($25,000 for single filers, $32,000 for married filing jointly), up to 50% of your benefits may be taxable. If it exceeds higher thresholds, up to 85% may be taxable. Maryland ignores this calculation entirely and taxes zero percent of your SSDI.

This means you could owe federal income tax on your SSDI while owing nothing to Maryland. You report the taxable portion of your SSDI on your federal return (Form 1040) but exclude all SSDI from your Maryland return. The two calculations are independent.

Some states tax SSDI; some do not. Maryland is one of the states that does not. If you moved to Maryland from another state or plan to move away, your SSDI tax treatment will change. Check the rules of any state you move to, because the exemption does not follow you.

SSDI and other Maryland tax credits you may may have access to for

Even though SSDI itself is not taxed, you may may have access to for Maryland tax credits that reduce what you owe on your other income. The Maryland Earned Income Tax Credit (EITC) is available if you have wages or self-employment income below certain limits. SSDI does not count as earned income, so it does not help you may have access to for the EITC, but if you work part-time or have other earnings, you may be may be able to access.

Maryland also offers a Property Tax Credit and a Rent Reduction Credit for low-income residents. These credits are based on your total income, including SSDI. If your SSDI plus other income falls within the income limits, you may reduce your property tax bill or receive a rent credit. These are refundable or partially refundable, meaning you can receive money back even if you owe no tax.

To claim these credits, you must file a Maryland return. Even if your non-SSDI income is below the filing threshold, filing can be worthwhile if you may have access to for a credit that results in a refund.

Reporting SSDI on your Maryland return

On Maryland Form 502 (the state income tax return), you do not report SSDI income at all. You report only your wages, self-employment income, interest, dividends, pensions, and other taxable income. The SSDI line is straightforward left blank or marked as zero.

You will receive a Form SSA-1099 from Social Security showing your SSDI payments for the year. Keep this for your records, but do not include the SSDI amount on your Maryland return. You may need to reference it if Maryland audits your return and asks about your income sources, but the amount itself does not appear on the form you file.

If you also receive Supplemental Security Income (SSI) — a different program for low-income disabled, blind, or elderly individuals — SSI is also not taxable in Maryland or federally. Do not confuse SSDI with SSI; they are separate programs with different rules, but both are exempt from Maryland tax.

What happens if you move out of Maryland

If you move to another state, Maryland's SSDI exemption no longer applies. You will be subject to that state's tax rules. Some states, like Pennsylvania and Illinois, also exempt SSDI. Others tax it like any other income. A few states have partial exemptions or exemptions only for residents over a certain age.

Before you move, research the tax treatment of SSDI in your new state. The difference can be significant. If you move mid-year, you may owe tax to both Maryland (for the months you lived there) and your new state (for the months you lived there). File a part-year return in Maryland and report your SSDI as exempt for the portion of the year you were a resident.

If you are considering a move and SSDI tax treatment is a factor, contact the tax department in the state you are moving to or consult a tax professional familiar with that state's rules. The exemption is not portable, and planning ahead can help you avoid surprises at tax time.

Frequently Asked Questions

Do I have to file a Maryland return if I only receive SSDI?

No. If SSDI is your only income, you have no Maryland tax filing requirement because SSDI is not counted toward the filing threshold. However, if you have any other income — wages, pensions, interest — you must file if that income exceeds Maryland's threshold ($15,000 for most filers in 2024).

I owe federal tax on my SSDI. Do I also owe Maryland tax?

No. Federal and Maryland tax rules are separate. You can owe federal tax on SSDI while owing zero Maryland tax. Report the taxable portion on your federal return and exclude all SSDI from your Maryland return.

Does SSDI count toward my income for Maryland rent or property tax credits?

Yes. SSDI counts as income when determining whether you may have access to for Maryland's Rent Reduction Credit or Property Tax Credit. If your SSDI plus other income is within the credit's income limits, you may may have access to. File a Maryland return to claim the credit even if you would not otherwise be required to file.

What if I receive both SSDI and SSI?

Neither SSDI nor SSI is taxable in Maryland. Exclude both from your Maryland return. If you have other income, report only that. Both programs are exempt under Maryland law.

Can I deduct medical expenses or disability-related costs on my Maryland return?

Maryland follows federal rules on medical deductions. You can deduct unreimbursed medical expenses only if you itemize deductions and the expenses exceed 7.5% of your adjusted gross income. SSDI itself does not create a special deduction, but if you have high medical costs and other income, you may benefit from itemizing.