Updated January 2026
Maryland Veteran Benefits 2026
Maryland offers several benefits for veterans and military retirees. Here is a summary of the key tax and property benefits available in MD for 2026.
Maryland Highlights
- Partial military retirement tax exemption
- Full property tax exemption for 100% disabled
- Free toll transponders for disabled veterans
- Maryland Veterans Trust Fund
Income Tax Treatment
Maryland has a state income tax.
Military Retirement Pay: Maryland excludes $12,500 of military retirement income for retirees under 55 and $20,000 for those 55 and older.
Active Duty Pay: Active duty pay earned outside Maryland is exempt.
VA Disability Compensation: VA disability compensation is tax-free at both the federal and state level in all 50 states. Maryland does not tax VA disability payments.
Property Tax Exemption for Disabled Veterans in Maryland
Type: Full exemption at 100%
Maryland fully exempts the dwelling of a veteran with a VA-rated 100% permanent & total (or 100% unemployable/TDIU) service-connected disability under Tax-Property §7-208. A separate statewide-OPTIONAL local credit (§9-265) gives a graduated county/municipal tax credit for veterans rated 50–99% — but only where the locality has adopted it.
| VA disability rating / category | What you get |
|---|---|
| 100% permanent & total (or 100% unemployable/TDIU) | Complete exemption from real property tax on the dwelling, lot, and necessary structures; statewide and mandatory under §7-208.VA must declare disability 100% service-connected permanent & total (or 100% unemployable). Principal residence; file SDAT Application with rating decision + DD-214. |
| 75%–99% service-connected | LOCAL-OPTION ONLY: credit equal to 50% of county/municipal property tax (not state tax, not full exemption); only in jurisdictions that adopted §9-265.Must not qualify for §7-208; prior-year federal AGI ≤ $100,000; locality must have enacted the credit. |
| 50%–74% service-connected | LOCAL-OPTION ONLY: credit equal to 25% of county/municipal property tax in jurisdictions that adopted §9-265.Prior-year federal AGI ≤ $100,000; locality must have enacted it. |
| Below 50% | No state exemption and no statewide-optional credit.Some counties may offer separate local programs. |
- Income limit: None for the §7-208 full exemption; $100,000 prior-year federal AGI cap for the §9-265 local-option graduated credit.
- Age requirement: None.
- Surviving spouse: Under §7-208, the unremarried surviving spouse (or spouse of a line-of-duty death, or DIC recipient) keeps the full exemption, transferable to a later dwelling. §9-265 credit may continue to the spouse where the locality provides.
- Counts being paid at 100% via unemployability (TDIU)? Yes — being paid at the 100% rate via Individual Unemployability (TDIU) qualifies
Source: Md. Code, Tax-Property §7-208 (full exemption); §9-265 (optional graduated local credit) and a second official source. Verified June 2026 against primary sources.
To apply, contact your county assessor's office or the Maryland Department of Veterans Affairs. You will typically need your VA disability rating letter (and often your DD‑214) and proof that the home is your primary residence.
Real estate vs. personal property: this benefit applies to real-estate (home/homestead) property tax. Personal-property taxes — such as the annual tax some states levy on vehicles — are separate and generally still apply, even at a 100% rating, unless your state specifically exempts them.
VA Healthcare in Maryland
Maryland has approximately 2 VA medical centers along with community-based outpatient clinics (CBOCs) throughout the state. Veterans enrolled in VA healthcare can receive care at any VA facility nationwide.
To find the nearest VA facility, visit VA.gov Facility Locator.