Maryland veteran taxes

Military retired pay in Maryland

Partly exempttax year 2025Sources 1, 2, 3

Maryland lets a resident subtract up to $12,500 of military retirement income if under age 55 on the last day of the tax year, or up to $20,000 if age 55 or older (Md. Code, Tax-General § 10-207(q); tax year 2025 Form 502 instructions, subtraction code u on Form 502SU). Military retirement income above those amounts is not covered by this subtraction.

Survivor Benefit Plan annuities

Partly exemptSources 2, 3, 4

Maryland law defines military retirement income as retirement income, including death benefits, received as a result of military service (Tax-General § 10-207(q)), and the Comptroller states that a surviving spouse may claim the subtraction for military retirement income received as a result of the deceased spouse’s military service. The same limits apply: up to $12,500 under age 55 and up to $20,000 at age 55 or older. The Comptroller’s sources do not name the Survivor Benefit Plan.

Property tax relief for disabled veterans

Exemption or creditSources 5, 6, 7

Maryland fully exempts from property tax the dwelling house of a disabled veteran, meaning an honorably discharged veteran declared by the U.S. Department of Veterans Affairs to have a permanent 100% service-connected disability that is reasonably certain to continue for life (Md. Code, Tax-Property § 7-208). The dwelling must be the legal residence, occupied by not more than 2 families, and includes its lot. Applications go to the Supervisor of Assessments of the State Department of Assessments and Taxation.

• The Department of Assessments and Taxation’s application asks for a VA rating of 100% permanent and total or 100% permanently unemployable.
• Disabled active duty service members with a lifelong service-connected disability also qualify; refunds of taxes paid while the exemption was available can be claimed if the application is filed within 3 years of first eligibility.

Vehicle registration for disabled veterans

Fee waiver or discountSources 8, 9, 10

Maryland exempts from registration fees a vehicle owned by, or leased to, and personally used by a veteran whom the U.S. Department of Veterans Affairs classifies as having lost the use of a hand, arm or leg or as totally disabled, or who has a qualifying permanent impairment of both eyes, and a vehicle owned and personally used by the surviving spouse of a deceased disabled veteran (Md. Code, Transp. § 13-903(a)(8) and (9)). The Motor Vehicle Administration says veterans rated 100% receive Disabled Veteran plates free of charge with no other fees and permanent registration; veterans with a service-connected disability or unemployability rating of 50% to 99% receive the plates free but still pay the annual registration fees and surcharge.

• Plates: Disabled Veteran plates, printed with or without the wheelchair symbol for veterans rated 100%, and with the words Disabled Veteran and no wheelchair symbol for veterans rated 50% to 99%; an appointment and a letter from the Department of Veterans and Military Families showing the rating are required.
• A disabled veteran whose vehicle is exempt may also receive other special registration plates without paying registration fees (Transp. § 13-903(d)); the Motor Vehicle Administration says vanity, organizational or other background plate fees still apply and such plates are not eligible for permanent registration.