Maryland does not tax SSDI income itself, but you may still owe property tax on your home

Social Security Disability Insurance (SSDI) is not taxed by Maryland as income. This means the monthly SSDI payment you receive is not subject to Maryland state income tax, and you do not report it on your Maryland tax return.

However, owning property in Maryland comes with property tax obligations that are separate from income tax. If you own a home or land in Maryland, you will owe property tax based on the assessed value of that property — regardless of whether your income comes from SSDI, wages, or another source. The property tax is not tied to your income at all.

The key distinction is this: Maryland will not tax your SSDI payments as income, but Maryland will tax the property you own. These are two different taxes with two different rules.

Key Takeaways

  • SSDI income is not taxed by Maryland, so you do not report it on your state tax return.
  • Property tax in Maryland is based on the value of your home or land, not on your income, so owning property means owing property tax even if your only income is SSDI.
  • Maryland offers a property tax credit called the Homeowners' Property Tax Credit for homeowners with lower incomes, which may reduce what you owe.
  • If you are over 65 or permanently disabled, you may be able to defer property taxes through Maryland's tax deferral program.
  • Your county assessor determines your property's assessed value, and you can challenge that assessment if you believe it is too high.

How Maryland property tax works when you receive SSDI

Maryland property tax is calculated by your county — not the state — and is based on the assessed value of your property multiplied by the local tax rate. The assessed value is set by your county assessor and is meant to reflect what your home would sell for on the open market.

Because property tax is based on property value, not income, receiving SSDI does not change how much property tax you owe. A homeowner with SSDI as their only income pays the same property tax rate as a homeowner with the same property value and wages.

Property tax bills are typically sent once or twice per year, depending on your county. The amount varies widely by county — some Maryland counties have higher tax rates than others. You can find your county's rate by contacting your county assessor's office or checking your property tax bill.

The Homeowners' Property Tax Credit for lower-income homeowners

Maryland offers a Homeowners' Property Tax Credit that can reduce your property tax bill if your income and home value fall within certain limits. This credit is designed for homeowners with lower incomes, and SSDI counts as income for this purpose.

To use this credit, your household income must be below a certain threshold (the limit changes each year), and your home's assessed value must be below a set amount. If you meet both conditions, you can claim the credit on your Maryland tax return, even though SSDI itself is not taxed.

You claim this credit by filing Maryland Form 502CR with your state tax return. Even if you do not normally file a return because SSDI is your only income, you may want to file one to claim this credit — it could lower your property tax significantly. Contact the Maryland Department of Assessments and Taxation to confirm the current income and property value limits, as they change annually.

Property tax deferral if you are over 65 or permanently disabled

Maryland has a Property Tax Deferral Program that allows homeowners age 65 and older, or those who are permanently disabled, to delay paying property taxes. If you are receiving SSDI because of a disability, you may be able to use this program.

Under this program, you do not pay property tax while you live in your home. Instead, the state places a lien on your property, and the deferred taxes are paid from the proceeds when you sell the home, move, or pass away. This means you keep your home without making annual property tax payments, but the debt does not disappear — it is collected later.

To explore for the deferral program, you must meet income limits and own your home outright or have a mortgage. Contact your county assessor's office to request an process and confirm whether you meet the requirements in your county.

Challenging your property assessment if you believe it is too high

If you think your home's assessed value is higher than it should be, you can file a formal challenge called an assessment appeal. A lower assessed value means lower property taxes, so this step can make a real difference.

The process and important date for filing an appeal vary by county, but most counties require you to file within 30 days of receiving your assessment notice. You will need to gather evidence — such as recent home sales of similar properties in your area, a professional appraisal, or documentation of needed repairs — to support your claim that the assessment is too high.

Your county assessor's office can tell you the exact important date and process for your county. Some counties offer informal review meetings where you can discuss the assessment before filing a formal appeal.

Federal income tax on SSDI and how it differs from Maryland tax

While Maryland does not tax SSDI, the federal government may. Whether you owe federal income tax on SSDI depends on your total income and filing status. If SSDI is your only income, you typically do not owe federal tax. But if you have other income — such as wages, interest, or pensions — some of your SSDI may become taxable at the federal level.

This is separate from property tax. Even if you owe federal income tax on SSDI (which is rare), you still owe Maryland property tax based on your home's value. The two taxes work independently.

Frequently Asked Questions

Do I have to file a Maryland tax return if SSDI is my only income?

No, you do not have to file a Maryland return if SSDI is your only income, because SSDI is not taxed by Maryland. However, you may want to file to claim the Homeowners' Property Tax Credit, which can reduce your property tax bill. Filing is free and can save you money.

Will my property tax bill go down if I receive SSDI?

No, receiving SSDI does not automatically lower your property tax. Your property tax is based on your home's assessed value, not your income. However, you may be able to reduce your bill by claiming the Homeowners' Property Tax Credit or by filing an assessment appeal if you believe your home is overvalued.

What happens if I cannot afford to pay my property tax?

If you are over 65 or permanently disabled, you may be able to defer your property taxes through Maryland's deferral program. If you do not meet those requirements, contact your county assessor about payment plans or hardship options. Unpaid property taxes can result in a lien on your home or foreclosure, so it is important to address this quickly.

Can I claim the property tax credit if I rent instead of own?

No, the Homeowners' Property Tax Credit is only for homeowners. If you rent, you do not pay property tax directly. However, some states offer renter tax credits — check with Maryland to see if one is available to you.

How do I find out what my county's property tax rate is?

Contact your county assessor's office directly — they can tell you your county's tax rate and your home's assessed value. You can also check your most recent property tax bill, which shows both the assessed value and the tax rate used to calculate what you owe.