Understanding state taxes
At a glance
• Federal taxes may get more attention, but state taxes also affect your bottom line.
• Some states follow federal tax law closely, while others create their own rules or modify federal rules for specific situations.
• Some states do not impose an income tax.
• States may offer unique credits, deductions, or programs that are only available if you file a state tax return.
• H&R Block helps with both state and federal tax filing, whether you file online or work with a local tax professional.
When it comes to taxes, federal rules usually get the spotlight—but state taxes matter, too. State taxes can impact your bottom line, so just like your federal return, it’s important to get the most money back from your state return—or avoid paying too much.
Read on to learn more about some of the nuances of state taxes.
State taxes can differ from federal
State tax rules don’t always line up with federal tax rules. For starters, not all states have an income tax. And for states that do have state income tax, each state sets its own tax rates.
Other differences include:
- While states sometimes mirror federal tax law, they may also modify federal rules or create their own rules for certain situations.
- Filing requirements can also vary based on residency, part‑year residency, or where income was earned.
State specific tax benefits and programs
In addition to their own tax rules, states may also offer specialized tax benefits. These can include credits or deductions designed to support state needs and priorities.
States may also have programs that are administered through the return filing process, meaning filing a state return is often the key to accessing those benefits. So, while you may not need to file state taxes, it might be in your interest to do so.
Find out about a few state-level benefits below.
File with H&R Block to get your max refund
How can I get help with state tax filing?
H&R Block can help you file your state and federal income tax returns, so you can get your maximum refund.* Whether you file on your own with H&R Block Online or with a tax pro, you can rely on our expertise to claim every credit and deduction you deserve.
- Our tax pros can help you navigate the nuances of your state taxes. With H&R Block, a local tax pro is within 5 miles of most Americans.
- H&R Block Online is built to make filing your state and federal returns easy, with helpful tips and an experience that guides you each step of the way.
*All tax situations are different. Not everyone gets a refund. See hrblock.com/guarantees for complete details.
Get help filing state and federal taxes today
Rely on the expertise of H&R Block whether you file on your own through H&R Block Online or file with a tax pro.
State-level tax benefits and programs
Maryland tax credits
Maryland Earned Income Tax Credit
Maryland offers an Earned Income Tax Credit (EITC) up to $4,000 for eligible individuals and families. You can claim the credit whether you’re getting a refund or owe taxes. The EITC can increase your refund or reduce what you owe to zero.
Your eligibility and the amount you could receive depends on several factors, including:
- Your Adjusted Gross Income (AGI)
- Your filing status
- How many children or qualifying relatives you claim
- Your level of investment income (must be less than $10,000)
Generally, if you qualify for the federal Earned Income Tax Credit, you also qualify for this state credit. Additional eligible residents include those who file with an Individual Taxpayer Identification Number (ITIN) and childless adults under 25.
Maryland Child Tax Credit
Parents who are residents of Maryland may be able to claim a Maryland Child Tax Credit (CTC) up to $500 for dependents under the age of 6 or for dependents with a disability under the age of 17. The credit begins to phase out for those with a federal Adjusted Gross Income over $15,000 and phases out completely at $24,000.
How to claim the Maryland EITC and CTC
You can claim the Maryland EITC and CTC when you file your return with H&R Block. Whether you file with a tax pro or with H&R Block Online, we’ll help you determine your eligibility and submit the necessary information as part of preparing your return.
Looking to file for free? With H&R Block Online, you can claim the Maryland Earned Income Tax Credit and Child Tax Credit and, if you qualify, you can file for free.
Approximately 52% of filers qualify for H&R Block Online Free Edition. Simple tax situations only (Form 1040 and no schedules except Earned Income Tax Credit, Child Tax Credit, Student Loan Interest, and Retirement Plan Distributions).
View federal and state forms included with H&R Block Online Free.
Other Maryland benefits
For those interested in other Maryland benefits, such as help with food, healthcare, energy or other costs, visit MarylandBenefits.gov to see if you qualify.
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