--- title: "Maryland Tax Law Updates: What Businesses and Families Should Know for 2025–2026" description: Maryland's tax law changes for 2025-2026 impact PTE income apportionment and expand tax abatement for deceased service members. 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[See My Savings](https://alltaxaccounting.com/complimentary-tax-optimization-analysis) This is a search field with an auto-suggest feature attached. - There are no suggestions because the search field is empty. ![Summer Blake](https://alltaxaccounting.com/hubfs/black_icon_white_background-2.png) [Summer Blake](https://alltaxaccounting.com/blog/author/alltax-accounting) [Tax Law](https://alltaxaccounting.com/blog/tag/tax-law) , [Business Tax Tips](https://alltaxaccounting.com/blog/tag/business-tax-tips) , [State Tax Law](https://alltaxaccounting.com/blog/tag/state-tax-law) , [Tax Planning](https://alltaxaccounting.com/blog/tag/tax-planning) , [Maryland Tax Legislation](https://alltaxaccounting.com/blog/tag/maryland-tax-legislation) Aug 06, 2025 # Maryland Tax Law Updates: What Businesses and Families Should Know for 2025–2026 ![featured_image](https://alltaxaccounting.com/hubfs/AI-Generated%20Media/Images/maryland%20tax%20changes%20for%20businesses%20and%20families-1.jpeg) #### Maryland Tax Changes for 2025–2026: Key Updates for Businesses and Families Maryland has enacted two significant tax law changes that will affect both business owners and families of deceased service members. These updates reflect the state’s evolving approach to income apportionment for pass-through entities and its commitment to honoring those who serve in uniform and public health roles. This article outlines the key provisions and offers guidance on how to prepare.   - ## Maryland Expands Apportionment of Pass-Through Entity (PTE) Income Effective for tax years beginning on or after January 1, 2026, Maryland will fully apportion the distributive or pro rata share of income from pass-through entities to Maryland for resident members—regardless of where the income is earned. ● Prior to 2026, Maryland taxed PTE income based on where the income-generating activity occurred. ● Starting in 2026, Maryland resident members of PTEs will have their entire share of income treated as Maryland-sourced. ● Nonresident members will continue to be taxed only on income attributable to Maryland-based business activity. ● This change applies to partnerships and S corporations. Partnerships may use separate accounting or apportionment; S corporations must use apportionment unless the activity is nonunitary. ● Businesses with multi-state operations should begin evaluating their structures and income flows to prepare for the 2026 tax year. -   -   **Why it matters**: This shift simplifies compliance but may increase Maryland tax liability for resident members of PTEs with out-of-state operations. Proactive planning is essential to avoid surprises. -   -   --- ## Maryland Broadens Tax Abatement for Deceased Uniformed Service Members Effective for tax years beginning after December 31, 2024, Maryland has expanded its income tax abatement provisions to include: ● Deceased members of the National Oceanic and Atmospheric Administration (NOAA) ● U.S. Public Health Service personnel ● Public health emergency responders who die in the line of duty Previously, tax abatement was limited to: ● Armed forces members who died in combat zones or from service-related injuries ● Military or civilian employees who died due to terroristic or military actions outside the United States -   -   **Why it matters**: This expansion ensures broader support for families of those who serve in critical national and public health roles. If your family has experienced a loss in service, you may now be eligible for state income tax forgiveness. -   -   --- ## What This Means for You Whether you are a Maryland resident involved in a pass-through entity or a family member of a deceased service member or responder, these updates could significantly affect your tax filings and planning strategies. -   -   AllTax Accounting can help you: ● Assess the impact of PTE apportionment changes ● Navigate eligibility for tax abatement ● Prepare for compliance and optimize your tax position -   -   --- ## Schedule a Consultation We’re here to help you stay ahead of legislative changes and protect your financial future. Contact AllTax Accounting today to schedule a consultation and ensure you're ready for the 2025–2026 tax seasons.   -   ---   ![Let's Connect](https://no-cache.hubspot.com/cta/default/49046262/interactive-191106518567.png)       Date Aug 06, 2025 Authors [Summer Blake](https://alltaxaccounting.com/blog/author/alltax-accounting) Categories - [Tax Planning (21)](https://alltaxaccounting.com/blog/tag/tax-planning) - [Tax Deductions (12)](https://alltaxaccounting.com/blog/tag/tax-deductions) - [Business Insights (11)](https://alltaxaccounting.com/blog/tag/business-insights) - [Tax Deadlines (11)](https://alltaxaccounting.com/blog/tag/tax-deadlines) - [Tax Law (11)](https://alltaxaccounting.com/blog/tag/tax-law) - [Business Tax Tips (10)](https://alltaxaccounting.com/blog/tag/business-tax-tips) - [Tax tips (10)](https://alltaxaccounting.com/blog/tag/tax-tips) - [Tax Credits (7)](https://alltaxaccounting.com/blog/tag/tax-credits) - [OBBBA (6)](https://alltaxaccounting.com/blog/tag/obbba) - 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(1)](https://alltaxaccounting.com/blog/tag/xero) - [s-corp (1)](https://alltaxaccounting.com/blog/tag/s-corp) See all Share [facebook-f icon](http://www.facebook.com/share.php?u=https://alltaxaccounting.com/blog/maryland-tax-law-updates-what-businesses-and-families-should-know-for-2025-2026) [linkedin-in icon](http://www.linkedin.com/shareArticle?mini=true&url=https://alltaxaccounting.com/blog/maryland-tax-law-updates-what-businesses-and-families-should-know-for-2025-2026) [twitter icon](https://twitter.com/intent/tweet?url=https://alltaxaccounting.com/blog/maryland-tax-law-updates-what-businesses-and-families-should-know-for-2025-2026) [pinterest-p icon](http://pinterest.com/pin/create/link/?url=https://alltaxaccounting.com/blog/maryland-tax-law-updates-what-businesses-and-families-should-know-for-2025-2026) [envelope icon](mailto:?body=https://alltaxaccounting.com/blog/maryland-tax-law-updates-what-businesses-and-families-should-know-for-2025-2026) ## Related Blogs 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