FY2026 Proposed Operating and Capital Budgets

FY2026 Proposed Budget Introduction

County Tax Rates

Income Tax Frederick County’s income tax rate was changed to introduce variable rates from 2.25% to 3.20% starting for calendar year 2024. The change will affect the income taxes collected for the second half of FY24 and a full year for FY25. The tax is assessed as a percentage of the taxpayer’s Maryland taxable income. Individuals who maintain legal residence in Maryland or who earn or receive income from Maryland sources must pay Maryland income tax. The six taxpayer classifications are single, married filing jointly, married filing separately, head of household, qualifying widow(er) with dependent child, and dependent taxpayer. Income earned by an estate of a deceased person is subject to income tax in the same manner as individuals.

Joint; Head of Household; Qualified Widow

Net Taxable Income

Rate

0-$25,000

2.25% 2.75% 2.96% 3.20%

$25,001-$100,000 $100,001-$250,000 $250,001 or more

Single; Married filing Separate; Dependent

Net Taxable Income

Rate

0-$25,000

2.25% 2.75% 2.96% 3.20%

$25,001-$50,000 $50,001-$150,000 $150,001 or more

The tax base is the taxpayer’s federal adjusted gross income adjusted by Maryland additions and subtractions, deductions and exemptions, yielding Maryland Taxable Income. The County’s tax rate is applied to Maryland Taxable Income.

Annual tax returns from individuals are due to the State Comptroller by April 15 of the year following the taxable year. Individuals who file income taxes electronically and pay the amount due electronically can pay by April 30. If the taxpayer uses a fiscal year basis, the returns are due on or before the fifteenth day of the fourth month following the end of the fiscal year. A quarterly declaration is due if the taxpayer expects to be under withheld by more than one-half of the federal threshold amount. Such taxpayers must file an estimated return and make quarterly payments on or before April 15, June 15, September 15, and January 15 of the next year.

Frederick County Income Tax - deductions & exemptions Maryland Taxable Income x County Tax Rate +/- modifications to income Federal Adjusted Gross Income Maryland Adjusted Gross Income

Employers are required to withhold taxes (based on withholding tables) from the wages of employees. Employers remit withholding taxes to the Comptroller monthly, quarterly, annually, seasonally, or as accumulated (for the largest employers) based on the amount of taxes withheld.

Recordation Tax Recordation is an excise tax imposed for the privilege of recording an instrument in the land records. Frederick County’s recordation tax rate for FY2026 is $7/$500 of consideration. The majority of the tax is dedicated to specific purposes including school construction, acquisition and development of park land, preserving agricultural lands, and to assist with affordable housing. The dedicated funds are recorded and tracked in various special revenue funds. The remaining amount (47.9 percent) is recorded in the General Fund.

Allocation % for each recordation dollar collected

24