Key figures
Maryland accounting
2026, with sources
A flat 8.25%, separate returns
Maryland taxes corporations at 8.25% of Maryland taxable income, on Form 500, administered by the Comptroller. The return starts from federal taxable income before the NOL deduction, then applies Maryland’s additions and subtractions. Maryland does not allow consolidated returns: each corporation in a federal consolidated group files its own Form 500 and its own estimated tax declarations.
Maryland’s NOL is the federal NOL without modification, so a startup’s Maryland carryforward generally tracks its federal one. Estimated payments are required once the year’s Maryland tax is expected to exceed $1,000, due the 15th day of the 4th, 6th, 9th and 12th months.
Single receipts factor, customer sourcing
For tax years beginning after December 31, 2021, most multistate businesses apportion on a single receipts factor. Receipts from service-related activities are included in the Maryland numerator when they are derived from customers within Maryland, under rules in COMAR 03.04.03.08D. That is market-based sourcing: a company with no Maryland staff but Maryland customers has a Maryland factor, and a Maryland-based team selling everywhere else has a small one.
An example: a Delaware C-corp with $4 million of revenue, $400,000 of it from customers in Maryland, and $1 million of taxable income apportions 10% to Maryland, $100,000, and owes $8,250 of Maryland tax.
Book-tax differences
The Comptroller treats Maryland as automatically decoupled, for 2025 and earlier years, from three business provisions of the 2025 federal law: full expensing of domestic research and experimental expenditures, the change to the business interest limitation, and the special depreciation allowance for qualified production property. The differences are reported on Form 500DM as addition modifications and recovered over time, which creates deferred items in the Maryland provision.
The 2026 General Assembly considered how far to continue that decoupling, so the Maryland treatment of 2026 research costs and depreciation should be read from the 2026 Form 500 instructions when they are published, not assumed from the federal return.
The federal baseline
This page covers what Maryland adds. The federal rules underneath it apply here too.
Common questions
How much of our income does Maryland tax?
On its Maryland share of income. Maryland apportions with a single receipts factor, and receipts from services count in the Maryland numerator when they come from customers in Maryland. A SaaS company’s Maryland factor follows its Maryland customers, not where its staff sit.
Does Maryland follow the 2025 federal R&D expensing?
Not for 2025. The Comptroller treats Maryland as automatically decoupled, for 2025 and earlier years, from the 2025 federal law’s full expensing of domestic research costs, its changes to the business interest limit and its special allowance for qualified production property; the differences are added back on Form 500DM. For 2026 and later, the treatment depends on what the General Assembly enacts, so it needs checking against the current Form 500 instructions.
Accounting next door
- DCDistrict of Columbia accountingDC taxes corporations at 8.25% through a franchise tax that works as an income tax, with a $250 or $1,000 minimum, water’s-edge combined reporting and market-based sourcing.
- DEDelaware accountingDelaware’s corporate income tax is 8.7% of apportioned federal taxable income, with separate-company returns and a single gross receipts factor. A Delaware corporation whose only Delaware activity is its registered office doesn’t file it, but still owes the franchise tax.
- PAPennsylvania accountingPennsylvania’s corporate net income tax is 7.49% for 2026 and falling, on separate-company returns with market-sourced services. Losses are capped as a share of income, and federal R&D expensing and bonus depreciation don’t carry through.
- VAVirginia accountingVirginia taxes corporations at a flat 6% with a double-weighted sales factor and cost-of-performance sourcing. It conforms to the IRC as of December 31, 2025 but decoupled from the 2025 R&D expensing and from bonus depreciation.
- WVWest Virginia accountingWest Virginia taxes corporations at 6.5% with mandatory combined reporting, a single sales factor and market-based sourcing since 2022, and conforms to federal tax changes enacted through 2025.
Founder guides on this
- US GAAPUS GAAP for early-stage startups, in plain EnglishAccrual accounting, revenue recognition (ASC 606), leases (ASC 842), stock compensation and capitalized software: what each means for a small company.
- R&D taxThe R&D tax credit and Section 174A for startupsEngineering salaries can earn a federal R&D credit against payroll tax, and Section 174A lets you deduct US research again. What qualifies, what to track.
- FundraisingAudit-ready books before your Series AInvestors, lenders and auditors ask for the same things: accrual statements, reconciled accounts and support for every balance. How to be ready first.
More of the Maryland guide
- ReceivablesReceivables and sales tax in MarylandSales tax registration, economic nexus, whether SaaS is taxable, and collecting from customers
- PayablesPayables and contractors in MarylandPaying vendors and contractors: 1099 filing, use tax, contractor tests and withholding
- PayrollPayroll taxes and employer rules in MarylandWithholding, unemployment insurance, paid leave, minimum wage and the rules on paydays
- ComplianceCompliance and filings in MarylandRegistering to do business, annual reports, franchise tax and the filing calendar
- AdvisoryAdvisory: credits and decisions in MarylandCredits, incentives and the decisions that are cheaper to get right the first time
Sources
Checked against each agency’s own page on . Rates and thresholds change, usually on January 1.
General information for US companies, not tax, legal or accounting advice for yours. Rules and thresholds change; confirm the specifics with a CPA or the agency before you act on them.