Side-by-side tax comparison between Kentucky (3.5% top rate, flat) and Maryland (5.75% top rate, graduated). See which state lets you keep more at every salary level, and how cost of living changes the picture.
Kentucky uses a flat income tax (3.5% flat) while Maryland has a graduated system (2-5.75% + local). On a $100K salary, Kentucky takes $3,500 in state and local taxes compared to Maryland’s $3,738 \u2014 a difference of $237.
Because Kentucky has flat brackets while Maryland is graduated, the gap between them changes at different income levels. Kentucky’s flat rate is predictable, while Maryland’s graduated brackets may benefit lower earners but penalize higher incomes.
Both states also impose local income taxes, adding further complexity. The local tax burden can vary significantly by city and county within each state.
Kentucky wins at 10 out of 10 salary levels tested. The advantage exists but is modest across the income spectrum.
| Salary | Kentucky | Maryland | Difference | Winner |
|---|---|---|---|---|
| $40K | $32,920 | $32,825 | −$95 | Kentucky |
| $50K | $40,605 | $40,486 | −$119 | Kentucky |
| $60K | $48,290 | $48,148 | −$143 | Kentucky |
| $75K | $58,913 | $58,734 | −$178 | Kentucky |
| $100K | $75,625 | $75,388 | −$238 | Kentucky |
| $120K | $88,995 | $88,710 | −$285 | Kentucky |
| $150K | $108,501 | $108,145 | −$356 | Kentucky |
| $200K | $141,887 | $141,412 | −$475 | Kentucky |
| $250K | $174,514 | $173,920 | −$594 | Kentucky |
| $300K | $204,829 | $204,116 | −$713 | Kentucky |
Take-home pay only tells part of the story. Kentucky has a cost of living index of 90 while Maryland is at 112 (national average = 100).
This is a substantial difference. After adjusting for cost of living, $100K in Kentucky has purchasing power of $84,028 compared to $67,310 in Maryland. Kentucky wins on both raw take-home and cost-adjusted purchasing power, making it the clear winner for a $100K earner.
For a single earner at $100K filing jointly, take-home becomes $81,210 in Kentucky and $80,973 in Maryland \u2014 a difference of $238. The gap remains similar regardless of filing status.
On paper, moving from Maryland to Kentucky would save $238/year on a $100K salary, or $1,188 over 5 years. But relocation involves real costs: moving expenses, potentially buying/selling a home, changing jobs, and adjusting to a new community.
At $238/year, the tax difference alone likely isn’t worth relocating for. Other factors — job market, lifestyle, family — should drive the decision. The tax savings are a nice bonus if you’re already considering the move for other reasons.