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Foreign Tax Credit (Investments) in Maryland 2026

Calculate your foreign tax credit (investments) tax savings in Maryland. With Maryland's 5.75% top state tax rate, your combined savings are higher.

Maryland Tax Overview

State Income Tax
5.75%
progressive
Sales Tax
6%
avg combined: 6%
Property Tax Rate
1.05%
Median Income
$90,203

8 brackets. County taxes add 2.25-3.20%. Both estate AND inheritance tax. Low standard deduction.

Maryland Income Tax Brackets (Single)

2%
$0 - $1,000
3%
$1,000 - $2,000
4%
$2,000 - $3,000
4.75%
$3,000 - $100,000
Your bracket
5%
$100,000 - $125,000
5.25%
$125,000 - $150,000
5.5%
$150,000 - $250,000
5.75%
$250,000 +
$5,000
Est. Total Savings
No Limit
Max Deduction
Tax Credit
Deduction Type
26.8%
Combined Tax Rate

Foreign Tax Credit (Investments) Savings Calculator for Maryland

$
$

Federal Savings

$5,000

22% bracket

Maryland State

$0

4.75% rate

Total Savings

$5,000

26.8% combined

Tax credits reduce your tax bill dollar-for-dollar, regardless of your tax bracket.

Savings by Tax Bracket in Maryland

10%
$5,000
12%
$5,000
22%
$5,000
24%
$5,000
32%
$5,000
35%
$5,000
37%
$5,000

Includes 4.75% Maryland state tax on top of federal savings.

Eligibility Requirements

Investors paying foreign taxes on international investments

  • 1Foreign taxes paid
  • 2Credit or deduction choice
  • 3Form 1116 for over $300

Maryland residents should verify that this deduction is also recognized on their state tax return for additional savings of up to 5.75%.

Common Mistakes to Avoid

  • !Taking deduction instead of credit
  • !Missing foreign tax on 1099
  • !Forgetting to claim the deduction on your Maryland state return (missing up to 5.75% additional savings)

Maryland Filing Tips

Total tax includes state and county. County tax adds significantly. Both estate and inheritance taxes apply. Low standard deduction makes itemizing worthwhile. Retirement income subtraction available for 65+.

Required Tax Forms

Form 1116Form 1099-DIV

File these forms with your federal tax return to claim the foreign tax credit (investments). Maryland may require additional state-specific forms.

Other Tax Deductions in Maryland

Capital Loss Deduction

Investment

~$803
est. savings

Tax-Loss Harvesting

Investment

~$6,080
est. savings

Investment Interest Expense

Investment

~$1,824
est. savings

Qualified Dividend Tax Rate

Investment

~$3,648
est. savings

Opportunity Zone Investment

Investment

~$12,159
est. savings

1031 Like-Kind Exchange

Investment

~$36,477
est. savings

QSBS Exclusion (Section 1202)

Investment

~$121,591
est. savings

Installment Sale

Investment

~$9,727
est. savings

Foreign Tax Credit (Investments) in Neighboring States

Pennsylvania

3.07% top rate (flat)

~$800
-4,200 vs Maryland

Delaware

6.6% top rate (progressive)

~$800
-4,200 vs Maryland

Virginia

5.75% top rate (progressive)

~$800
-4,200 vs Maryland

West Virginia

5.12% top rate (progressive)

~$800
-4,200 vs Maryland

District of Columbia

10.75% top rate (progressive)

~$800
-4,200 vs Maryland

Tax Calculators for Maryland Cities

BaltimoreColumbiaGermantownSilver SpringFrederickWaldorfEllicott CityGlen BurnieRockvilleBethesda

Calculate Your Full Tax Savings in Maryland

Use our free tax calculators to optimize your entire tax return for Maryland.

Income Tax CalculatorMaryland Income TaxFull Foreign Tax Credit (Investments) Guide

Frequently Asked Questions

How much can I save with the Foreign Tax Credit (Investments) in Maryland?

In Maryland, the foreign tax credit (investments) can save you an estimated $5,000 per year on a $5,000 deduction. This includes $5,000 in federal tax savings and $0 in Maryland state tax savings at the 4.75% marginal rate. The national average savings is $800/year.

What is the Maryland state income tax rate?

Maryland has a progressive income tax system with a top rate of 5.75%. 8 brackets. County taxes add 2.25-3.20%. Both estate AND inheritance tax. Low standard deduction.

Who qualifies for the Foreign Tax Credit (Investments) in Maryland?

Investors paying foreign taxes on international investments. The eligibility requirements are the same whether you live in Maryland or another state, as this is a federal tax credit. However, your total savings will vary based on Maryland's 5.75% top state tax rate.

What tax forms do I need to claim the Foreign Tax Credit (Investments) in Maryland?

To claim the foreign tax credit (investments), you need to file Form 1116 and Form 1099-DIV with your federal return. Maryland residents should also check if the state allows this deduction on their state return for additional savings of up to 5.75%. Filing status affects your deduction limits and tax bracket.

Is the Foreign Tax Credit (Investments) better in Maryland than in states without income tax?

Yes, Maryland residents benefit more because the state's 5.75% top income tax rate means the deduction reduces both your federal AND state tax liability. In states with no income tax (like Texas, Florida, or Nevada), this deduction only reduces federal taxes. Your combined rate of 26.8% means more savings per dollar deducted.

What is the standard deduction in Maryland for 2026?

Maryland's standard deduction is $2,550 for single filers and $5,150 for married filing jointly. Total tax includes state and county. County tax adds significantly. Both estate and inheritance taxes apply. Low standard deduction makes itemizing worthwhile. Retirement income subtraction available for 65+.

Related Calculators

Capital Loss Deduction in Maryland

Avg savings: $660/year

Tax-Loss Harvesting in Maryland

Avg savings: $5,000/year

Investment Interest Expense in Maryland

Avg savings: $1,500/year

Qualified Dividend Tax Rate in Maryland

Avg savings: $3,000/year

Opportunity Zone Investment in Maryland

Avg savings: $10,000/year

1031 Like-Kind Exchange in Maryland

Avg savings: $30,000/year