Maryland tips tax calculator and $3.63 tipped wage

Maryland taxes tips at both the state and county level — the federal deduction is “below the line” and does not reach Maryland AGI — and the No Income Taxes on Tips Act stalled after a January 2026 hearing.

Your Maryland tips

State where you work Qualified tips this year

Voluntary cash and card tips on your W-2, 1099 or Form 4137 — not service charges.

Tax year

2025202620272028

Filing status Other income in your AGI

Wages without the tips, plus any other income (both spouses if filing jointly).

Your occupation The 71 Treasury Tipped Occupation Codes in the final rule (TD 10044).

How you are paid

Employee (W-2) Self-employed (1099)

More options

Itemized deductions (if larger than the standard deduction)

State marginal rate override (%) Leave blank to use the state’s published rate for your bracket.

Federal income tax saved in 2026Deduction $18,000 at 12% $2,160

$18,000 of the $25,000 cap used (72%)

Qualified tips	$18,000
After the $25,000 cap	$18,000
Income phase-out (MAGI $48,000)	$0
Tips deduction	$18,000
Federal tax before → after	$3,580 → $1,420
Social Security & Medicare still due on tips	$1,377
Maryland 2026: Tips stay taxable in this state	$0
Total income tax saved	$2,160

What the estimate leaves out

HB 201, the bill that stalled

HB 201 (2026) would have created a subtraction for tips earned in food service, at businesses licensed for on-sale alcohol, in hotels, and in passenger-for-hire and taxicab work. The Department of Legislative Services noted that the federal deduction does not flow through to the Maryland return. The bill had a House hearing on January 29, 2026 and did not pass, so tips stay in Maryland AGI — the base for county income tax as well.

Maryland figures

Cash wage / minimum	$3.63 / $15.00
In force	July 1, 2026
Next change	none scheduled
Tipped threshold	More than $30 a month in tips
Tips on the 2025 return	tips stay taxable in this state. The federal deduction is “below the line,” so it does not reach Maryland AGI; Maryland has no matching subtraction. Source: Maryland General Assembly / Department of Legislative Services
Tips on the 2026 return	tips stay taxable in this state. HB 201 (No Income Taxes on Tips Act) had a hearing on Jan. 29, 2026 and was not enacted. Source: Maryland General Assembly / Department of Legislative Services

Paying tipped workers in Maryland

Maryland requires $3.63 an hour in cash against the $15.00 minimum for employees earning more than $30 a month in tips. Restaurants using the credit must give each tipped worker a Tip Credit Wage Statement every pay period showing cash wage plus tips per hour. Montgomery, Howard and Prince George’s counties set higher local minimums.

A Baltimore server

$21,000 of qualified tips save $2,520 federally; Maryland and the county tax all of it. Thirty hours at $3.63 plus $200 of tips leaves $141 for the restaurant to make up — and the Tip Credit Wage Statement should show it.

Check a Maryland workweek

Employer make-up owed$3.63 cash wage + tips must reach $15.00 an hour. $214

Minimum for the hours	$480
Cash wage paid	$116
Tips counted toward the minimum	$150
Your effective hourly pay	$15.00

How the make-up rule works

Where these figures come from

Federal rules: how the deduction works. Nearby: Pennsylvania, Delaware, Virginia, West Virginia, District of Columbia.

Figures verified against primary sources on October 5, 2026