Maryland combines state and county income taxes that together reach 8–9% for some retirees. Florida's answer: zero. Here's the full cost comparison for MD retirees heading south.
Maryland is one of the few states that levies both a state income tax and a separate county income tax — creating a combined burden that can exceed 8% for residents of high-rate counties. For retirees drawing pensions, IRA distributions, and investment income, the combined Maryland tax bill is meaningful. Florida eliminates it entirely. Maryland also has an estate tax. The financial case for the move is among the stronger ones available to East Coast retirees.
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Talk to a Specialist →| Income Source | Maryland Treatment | Florida Treatment |
|---|---|---|
| Social Security | Exempt (if income below $100K joint) | No state tax |
| Military pension | Exempt up to $5,000 (age 55+) or $15,000 (age 65+) | No state tax |
| Federal pension (non-military) | Taxed; modest exemption for age 65+ | No state tax |
| Maryland state pension | Taxed; partial exemption available | No state tax |
| IRA / 401(k) distributions | Taxed at state + county rates combined | No state tax |
| Investment income | Taxed at state + county rates | No state tax |
| Maryland Jurisdiction | County/Local Rate | Combined with State Top Rate |
|---|---|---|
| Montgomery County | 3.20% | ~8.95% |
| Howard County | 3.20% | ~8.95% |
| Prince George's County | 3.20% | ~8.95% |
| Anne Arundel County | 2.81% | ~8.56% |
| Baltimore City | 3.20% | ~8.95% |
| Baltimore County | 2.83% | ~8.58% |
Maryland property taxes are moderate by Northeast standards but significant in high-value suburban counties. The state has a homeowners tax credit and senior credits that reduce the burden for qualifying residents — programs you give up when you leave.
| Maryland County | Home Value | Annual Tax (est.) | Hillsborough FL (w/ homestead) |
|---|---|---|---|
| Montgomery County | $680,000 | ~$6,800 (1.0%) | ~$4,475 on $340K FL home |
| Howard County | $580,000 | ~$6,380 (1.1%) | ~$4,475 on $340K FL home |
| Anne Arundel County | $500,000 | ~$5,500 (1.1%) | ~$3,850 on $300K FL home |
| Baltimore County suburbs | $420,000 | ~$4,620 (1.1%) | ~$3,850 on $300K FL home |
Maryland levies an estate tax on estates over $5 million (as of 2024), with rates up to 16%. Florida has no estate tax. For Maryland retirees with substantial assets — real estate, federal pension survivor benefits, investment portfolios — establishing Florida domicile before death can eliminate Maryland estate tax exposure. Combined with the income tax savings, the total lifetime financial benefit of the move can be very large for high-asset Maryland residents.
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Montgomery County is one of the highest-income counties in the country, and home values have appreciated dramatically. Bethesda, Chevy Chase, Potomac, and Rockville homeowners commonly have $500,000–$1,200,000+ in home equity. Howard County, Anne Arundel County, and Baltimore suburbs have similarly appreciated.
Maryland's DC suburbs are home to one of the largest concentrations of federal government retirees in the country. CSRS and FERS pensions are taxed by Maryland at combined rates up to nearly 9% (after the modest federal pension exclusion). Moving to Florida eliminates this entirely.
A federal retiree drawing $70,000/year in FERS/CSRS pension from Montgomery County pays roughly $4,500–$5,500 in combined state and county income tax on that income. Florida taxes it at zero. Over 20 years of retirement, that's $90,000–$110,000 in tax savings on the pension alone — not counting IRA distributions or investment income.
We work with federal retirees and DC-area buyers regularly. Let's match your equity and income situation to the right Sun City Center community.
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