Maryland tax payment plan with the Comptroller

What sets Maryland apart: the MVA hold

Maryland links tax debt to your car. Under state law, unpaid and undisputed state tax must be settled before a Maryland driver’s license or vehicle registration can be renewed, as the MVA and license holds page explains. Contact the Comptroller’s MVA hold team to release a hold. They explain the down payment needed to release it and to begin a repayment plan.

Several state and local agencies also check your tax records before you renew a business or a professional license. Paying in full or making a satisfactory payment arrangement clears the way.

How can I begin a Maryland payment plan?

The first step is your bill. Set up a plan online only after you check whether you qualify, as the individual payment plan explains. If you are not eligible or prefer not to use the online system, fill out the bottom part of your bill and send it back. The Collection Section can also help by phone or email.

Once a plan is active, you can pay through the state’s recurring direct debit program instead of mailing checks. The billing notices guide also explains the order in which your payments are applied: penalty comes first, then interest, then tax.

Business tax plans and the six-month rule

The Business Collections Section is who businesses deal with. The business plan page says the Comptroller usually files no lien when you set up a short-term plan lasting six months or less. A plan lasting more than six months requires a Collections supervisor’s sign-off. Filing future returns stays your duty under a plan and any money the state owes your business reduces the debt.

Notices you may still get under a payment plan

What each letter means is explained in the collection notices guide:

• A Notice of Income Tax Assessment arrives even when a plan exists. It lists penalty and interest to date.
• Intent to Offset notice; state vendor payments are protected as long as your plan stays in good standing, but a federal refund you get is still taken unless you pay off the balance in full.
• If a payment is missed, a new tax bill builds up or a payment bounces back, an Agreement Default Notice follows.
• A Payment Cancellation Notice arrives when the plan is not made current again after a default.

Interest and enforcement when you do not pay

Interest starts counting on the date your payment was originally due. The rate for calendar year 2025 is 11.4825% under Maryland law, while penalties for late payment may reach 25% of the tax. Both details appear in the Comptroller’s compliance FAQ. Once an assessment is issued, you have 30 days to appeal. After that period, collection starts and the Comptroller has these tools available:

• A salary lien takes a portion of your disposable wages. The larger of 75% of disposable wages and $145 times the weeks worked is protected by the rules for salary liens.
• A tax lien recorded with the circuit court clerk has about the same effect as a court judgment and may hurt your credit.
• Seizure of real property, vehicles, bank accounts, equipment and inventory
• A referral of your case to IC System or Penn Credit, both collection agencies, can add extra fees.

Paying the Comptroller and the IRS at the same time

A Maryland plan does not cover federal tax and an IRS installment agreement does not cover Maryland tax. If you owe both, expect two separate payments every month, each under a separate agreement. Stay current on both, because a default on the state plan starts collection again in Maryland.

Nearby states

• Pennsylvania
• Delaware
• Virginia
• West Virginia
• District of Columbia
• All states