Healthcare Accounting in Maryland
Healthcare accounting in Maryland now has to account for the 2025 Budget Reconciliation and Financing Act: new state income tax rates of 6.25% and 6.5% at the top, county income tax of 2.25% to 3.30%, an extra 2% on net capital gains for individuals with federal AGI above $350,000, and a 3% sales tax on data, IT and software publishing services. A pass-through practice can elect to pay tax for its members, who take a credit for it. Sorso provides monthly accounting from $2,000 a month and fractional CFO support from $4,000 a month for Maryland clinic owners.
Accounting and CFO work for Maryland clinics after the 2025 tax changes
Maryland added two top income tax brackets for 2025, raised the ceiling on county income tax to 3.30% and started taxing data and software services at 3%. Each one lands on a clinic owner's numbers in a different place.
Serving outpatient clinics across Baltimore, Bethesda / Rockville, Silver Spring, and the rest of Maryland.
Maryland at a glance
Worked example
Maryland's new brackets, on a $1.2 million income
Maryland's state income tax now has ten brackets for a single filer. An illustrative practice owner with $1,200,000 of Maryland taxable income runs through all of them below, before county tax.
Single filer, $1,200,000 of Maryland taxable income
| Taxable income | Rate | In this bracket | Tax |
|---|---|---|---|
| First $3,000 | 2% to 4% | $3,000 | $90.00 |
| $3,001 to $100,000 | 4.75% | $97,000 | $4,607.50 |
| $100,001 to $250,000 | 5% to 5.5% | $150,000 | $8,062.50 |
| $250,001 to $500,000 | 5.75% | $250,000 | $14,375.00 |
| $500,001 to $1,000,000 | 6.25% | $500,000 | $31,250.00 |
| Over $1,000,000 | 6.5% | $200,000 | $13,000.00 |
| Maryland state income tax, 5.95% of $1,200,000 | $71,385.00 | ||
What sits on top, and what can change it
- 1County income tax adds 2.25% to 3.30% of Maryland taxable income, depending on the county: $27,000 to $39,600 on this income.
- 2If the income includes net capital gain and federal AGI is above $350,000, an additional 2% applies to that gain, with exclusions such as a primary residence sold for less than $1.5 million.
- 3A pass-through practice can elect to pay the tax for all its members, at the top state rate plus the lowest county rate set by any county; each member takes a credit for their share.
- 4For federal purposes the practice deducts an entity-level payment when it computes its income (IRS Notice 2020-75), so it does not run into each owner's personal SALT limit.
Illustrative owner, not a client. Brackets, county range, capital gains rule and the pass-through entity rate are from the Maryland Code, Tax-General §§10-105, 10-106 and 10-102.1; the federal deduction rests on IRS Notice 2020-75. The bracket rows for $1 to $3,000 and $100,001 to $250,000 combine Maryland's separate 2%, 3%, 4%, 5%, 5.25% and 5.5% steps.
Sources: Maryland Code, Tax-General §10-105 (income tax rates); Maryland Code, Tax-General §10-106 (county income tax); Maryland Code, Tax-General §10-102.1 (pass-through entity tax); IRS Notice 2020-75 (entity-level state tax payments).
Local Market Dynamics
Where the 2025 changes reach a Maryland clinic's P&L
For a Maryland practice the margin questions run through tax, real costs and the line between a procedure room and a regulated facility.
Owner pay after the new brackets
With 6.25% and 6.5% added at the top and county tax of up to 3.30% on top, a single owner above $500,000 of Maryland taxable income now pays a combined state and county rate of 8.5% to 9.8% on the last dollar, depending on income and county. That changes the arithmetic of salary, distributions and the pass-through entity election, so the 2024 plan does not carry over.
Source: Maryland Code, Tax-General §10-105 (income tax rates)
Software costs up 3%
Practice management, billing, analytics and IT support can fall inside the taxed NAICS sectors. For a group with a large software stack the tax is small next to payroll, but it is a recurring cost increase that should be in the budget and checked on vendor invoices.
Source: Maryland Code, Tax-General §11-101 (taxable services, NAICS sectors)
Staff pay near the national average
BLS puts the 2025 mean wage for medical assistants in Maryland at $46,390, close to the national $46,120, and for registered nurses at $99,010. Practices recruit against large systems that sit close together, so pay has to be budgeted as a market price, not last year's number plus a raise.
Source: BLS Occupational Employment and Wage Statistics, Medical Assistants (May 2025)
Adding procedure capacity
The jump from two to three operating rooms changes the regulatory path from a determination of coverage to a full Certificate of Need. A capital plan for a surgery center has to say which side of that line it is on and what the review does to the timeline.
Source: Maryland Health Care Commission: Ambulatory surgery determination of coverage (August 2024)
Tax & Regulatory
What the Tax-General Article now says
Most of what matters for a Maryland clinic owner in 2026 is in four sections of the Tax-General Article, all changed or added in 2025.
Rates and thresholds move, often every legislative session. Treat what follows as a starting point for a conversation with your tax adviser rather than current filing guidance, and confirm anything you plan to act on against the state’s own published rates.
Two new top brackets: 6.25% and 6.5%
For a single filer, Maryland's rate is 5.75% on taxable income from $250,001 to $500,000, 6.25% from $500,001 to $1,000,000 and 6.5% above $1,000,000. For a joint return the 6.25% bracket runs from $600,001 to $1,200,000 and 6.5% applies above $1,200,000. The worked example on this page runs a $1.2 million income through every bracket.
Source: Maryland Code, Tax-General §10-105 (income tax rates)
County income tax up to 3.30%
On top of the state rate, every county sets its own income tax, which by law must be at least 2.25% and not more than 3.30% of Maryland taxable income. Where the owner lives therefore changes the total by up to a little over a percentage point.
Source: Maryland Code, Tax-General §10-106 (county income tax)
An extra 2% on net capital gains
Individuals with federal adjusted gross income above $350,000 pay an additional 2% on net capital gain included in their Maryland income, with exclusions that include a primary residence sold for less than $1.5 million and retirement accounts. For an owner selling a practice or its real estate, that belongs in the sale model.
Source: Maryland Code, Tax-General §10-105 (income tax rates)
The pass-through entity tax
A Maryland pass-through entity can elect to pay tax on behalf of all its members. For individual members the rate is the top state rate plus the lowest county rate set by any Maryland county; for corporate members it is the corporate rate. Each member then claims a credit for their share of what the entity paid.
Source: Maryland Code, Tax-General §10-102.1 (pass-through entity tax)
3% sales tax on data, IT and software services
Services in NAICS sectors 518, 519 and 5415 (data and IT services) and 5132 (software publishing) are now taxable in Maryland at 3% of the taxable price. A clinic's practice management, billing and other software subscriptions are worth checking against those definitions.
Source: Maryland Code, Tax-General §11-104 (3% rate on data and IT services)
Certificate of Need for surgery centers
The Maryland Health Care Commission treats a facility with two or fewer operating rooms as an ambulatory surgery center, which needs a determination of coverage. A facility with three or more operating rooms is an ambulatory surgical facility and needs a Certificate of Need.
Source: Maryland Health Care Commission: Ambulatory surgery determination of coverage (August 2024)
Maryland Healthcare Landscape
The Maryland market: large systems, close together
KFF counts 24,521 professionally active physicians in Maryland as of September 2026, and the main clinic markets are the Baltimore metro and the Washington suburbs of Montgomery and Prince George's counties. The academic systems are large and close together, and independent practices compete with them for patients, referrals and staff.
Maryland expanded Medicaid on January 1, 2014, so the payer mix looks different from a non-expansion state. Medical assistant pay sits close to the national average: BLS puts the 2025 mean at $46,390 in Maryland against $46,120 nationally, and registered nurses at $99,010.
What changed most recently is tax. The 2025 Budget Reconciliation and Financing Act added rates of 6.25% and 6.5% at the top of the state income tax, an extra 2% on net capital gains for higher earners, a higher ceiling for county income tax and a 3% sales and use tax on data, IT and software publishing services. Practices that were planned on the old rules need a new set of numbers.
Dominant outpatient specialties
For procedural specialties, the number of operating rooms decides the regulatory path: two or fewer is an ambulatory surgery center, three or more needs a Certificate of Need.
- Primary care and internal medicine groups in the Baltimore and Washington suburbs
- Gastroenterology, orthopedics and other procedural specialties weighing an ambulatory surgery center
- Dermatology and aesthetics, with a self-pay line that is exposed to the new top brackets
- Behavioral health groups with Medicaid, commercial and self-pay patients
- Dental groups across the Baltimore–Washington corridor
- Physical therapy and chiropractic clinics growing across county lines
Major systems you compete against
Maryland's large systems sit within an hour of each other, so most independent clinics share their market, their referral sources and their hiring pool with at least two of them.
Johns Hopkins Medicine
Academic health system of Johns Hopkins University, based in Baltimore.
University of Maryland Medical System
Health system affiliated with the University of Maryland School of Medicine.
MedStar Health
Non-profit system across the Baltimore–Washington region.
LifeBridge Health
Baltimore system anchored by Sinai Hospital of Baltimore.
Adventist HealthCare
Non-profit system based in Montgomery County.
How Sorso Helps Maryland Clinics
Accounting and CFO work for Maryland practices
For Maryland practices the work is monthly books that hold up, then the decisions the 2025 changes reopened: owner pay, the pass-through entity election, software costs and surgery center plans.
- •Monthly accounting with location- and provider-level P&Ls reconciled to your practice management system.
- •Fractional CFO support for Maryland clinics from about $3M of revenue, including owner pay and pass-through entity election modeling under the new brackets.
- •A review of software and IT vendor invoices against the 3% data and IT services tax.
- •Capital plans for procedure rooms and surgery centers that include the MHCC coverage or Certificate of Need path.
- •Sale readiness that models the 2% capital gains surtax alongside the price.
If your tax plan was built before the 2025 changes, it is out of date.
Run your own numbers first
Before any of the Maryland specifics matter, it helps to know whether your practice is off-benchmark at all. These are free, need no email, and run in your browser.
What Maryland owners ask about the new brackets, the election and the IT tax
How much more do we pay under Maryland's 2025 brackets?
Only on income above $500,000 for a single filer or $600,000 on a joint return. Up to those amounts the rates did not change. Above them, 6.25% applies up to $1,000,000 single or $1,200,000 joint and 6.5% beyond. For a single owner with $1,200,000 of Maryland taxable income, the state tax is $71,385 before county tax, and county tax adds between 2.25% and 3.30% depending on where the owner lives.
Should our practice elect the Maryland pass-through entity tax?
It is worth modeling every year. The practice pays the tax for its members at the top state rate plus the lowest county rate, each member takes a credit for their share, and the federal deduction happens at the entity level. Whether it saves money depends on each owner's federal position and county, which is why we model it owner by owner.
Does the 3% tax apply to our EHR and billing software?
It can. The tax covers services in NAICS sectors 518, 519 and 5415, which are data and IT services, and 5132, which is software publishing. Many practice management and billing subscriptions fall into those categories. We check vendor invoices against the definitions and budget the cost, and your vendor should be charging it if it applies.
Sources
- KFF: Professionally active physicians (September 2026)
- KFF: Status of state Medicaid expansion decisions (as of October 2026)
- Maryland Code, Tax-General §10-105 (income tax rates)
- Maryland Code, Tax-General §10-106 (county income tax)
- Maryland Code, Tax-General §10-102.1 (pass-through entity tax)
- Maryland Code, Tax-General §11-104 (3% rate on data and IT services)
- Maryland Code, Tax-General §11-101 (taxable services, NAICS sectors)
- Maryland HB 352 (2025), Budget Reconciliation and Financing Act of 2025
- Maryland Health Care Commission: Ambulatory surgery determination of coverage (August 2024)
- BLS Occupational Employment and Wage Statistics, Medical Assistants (May 2025)
- BLS Occupational Employment and Wage Statistics, Registered Nurses (May 2025)
By specialty
Specialty-specific accounting in Maryland
Clinic finance in Maryland does not look the same across specialties. Benchmarks, payer mix, and cost structure differ materially.
Dental
Accounting and fractional CFO
Physical Therapy
Accounting and fractional CFO
Dermatology
Accounting and fractional CFO
Mental Health
Accounting and fractional CFO
Urgent Care
Accounting and fractional CFO
Med Spa
Accounting and fractional CFO
Chiropractic
Accounting and fractional CFO
Ophthalmology
Accounting and fractional CFO
Other state guides
Full guides for four other states
Texas
Healthcare accounting
California
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New York
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Florida
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New Jersey
Healthcare accounting
Alabama
Healthcare accounting
Utah
Healthcare accounting
Compare all 50 states on state income tax and Medicaid expansion. Sorso works with clinics in every state.
Talk it through
Want Stan to look at this for your clinic?
Stan Sukhinin, CFA, founded Sorso in 2020: a fractional CFO and accounting firm for outpatient clinics across the US, with accounting from $2,000 a month and fractional CFO from $4,000. Book a free 30-minute call, bring the question and, if you have it, last month's P&L, and he will tell you what he would check first.
Founder of Sorso and a CFA charterholder. Before Sorso, Stan spent 19 years in corporate finance at institutions including UniCredit and Société Générale — managing a $450M loan portfolio and making senior partner at a major mezzanine lender by 29 — then built a fractional CFO firm exclusively for outpatient healthcare clinics.