Does Maryland follow the federal no-tax-on-tips and overtime deductions?
DOES NOT CONFORM
Maryland does not follow the federal deductions for state income tax. You can still claim the tips and overtime deductions on your federal return (Schedule 1-A) — they simply do not reduce your Maryland state tax. Do not assume your state return treats this income the way your federal return does.
Verified against the official state source below — last verified October 26, 2026
| Deduction | Maryland position |
|---|---|
| Federal tips deduction (IRC §224) | Does not conform |
| Federal overtime deduction (IRC §225) | Does not conform |
What the state itself says
"these provisions do not flow to the Maryland return, and, therefore, do not impact the individual's Maryland tax liability."
- Official source
- Comptroller of Maryland, "Tax Alert — Maryland Impacts of the One Big Beautiful Bill Act (PL 119-21)" (effective Jan. 6, 2026)
- Tax years covered
- 2025–2028.
Maryland starts from federal AGI. The alert names IRC §224 and §225 specifically: they are deductions from FAGI that are not reported on the Maryland return and cannot be claimed as Maryland itemized deductions. Express, provision-specific official guidance. (Note: a secondary roundup reported Maryland would "decouple in 2025 and conform in 2026, absent legislative action" — the Comptroller's own alert, which governs here, states non-conformity for the deductions across 2025–2028.)
Your federal deduction is separate
Whatever your state does, the federal deductions run on their own rules: check your W-2 codes with the W-2 Code Checker, estimate with the Tips Calculator and Overtime Calculator, and see the glossary for any term. All state positions: the state-by-state index.
State position verified October 26, 2026 from the official source above. State guidance changes; confirm on the source before filing. This page is general information, not tax advice.