Maryland Tax Lien: Filing, Removal, and Options Explained

Every year, thousands of Maryland residents receive a notice from the Comptroller of Maryland alerting them to an unpaid balance that has now turned into a Maryland tax lien. According to state data, even small debts exceeding $250 in unpaid property taxes can trigger a lien that attaches directly to a homeowner’s property. For many, the result is a stressful mix of financial uncertainty and fear of losing their home or refund.

A tax lien is more than just a notice; it is a legal claim that can affect your ability to sell property, secure credit, or refinance a mortgage. Ignoring it only worsens the situation. Interest continues to accrue weekly, court fees may be added, and your credit report can reflect the lien until it is released. These consequences make it essential to act quickly once an assessment notice is received.

This article explains how Maryland tax liens work, the steps of the Comptroller of Maryland and local county offices when filing, and the available options to remove or dispute a lien. You will learn how to file payments correctly, avoid common mistakes that delay resolution, and access official resources for assistance. Whether you are an individual taxpayer facing your first lien or a property owner trying to restore good standing, understanding your rights and obligations under the Annotated Code of Maryland is the first step toward protecting your property and financial security.

Understanding the Maryland Tax Lien Process

Before exploring how to remove or dispute a lien, it is essential to understand what a Maryland tax lien is, how it is created, and which state offices are responsible for recording it. This knowledge helps taxpayers act quickly, avoid unnecessary penalties, and protect their property or credit from further harm.

What Is a Maryland Tax Lien?

A Maryland tax lien is a legal claim by the state government against a person’s property for unpaid taxes. It acts as a public notice that the Comptroller of Maryland or local tax collector has a right to the taxpayer’s assets until the debt is satisfied. When the lien is recorded, it attaches to the taxpayer’s property and remains in place until the balance, including accrued interest and fees, is paid in full.

In Maryland, this process occurs under the Annotated Code of Maryland, which gives the state authority to file liens automatically once taxes become delinquent. The lien protects the government’s financial interest and ensures the taxpayer cannot transfer property or receive a refund until the debt is resolved.

Types of Tax Liens in Maryland

Maryland enforces three main types of liens. Each operates differently depending on the nature of the unpaid tax liability.

1. Property Tax Lien: This occurs when a homeowner fails to pay county or city property taxes. Under Maryland law, a property tax lien arises automatically once unpaid taxes exceed $250. The lien is recorded in both the circuit court and the recorder of deeds, preventing the sale or transfer of the property until the debt is settled.
   
   
2. State Income Tax Liens: When an individual or business fails to pay state income tax, the Comptroller of Maryland files a lien against real and personal property. This lien may restrict the taxpayer from selling assets, applying for credit, or maintaining good standing with the state until the balance is paid.
   
   
3. Federal Tax Liens: Although separate from state liens, the Internal Revenue Service can file federal tax liens within Maryland’s circuit courts. These liens are governed by federal law but recorded in the same offices as state liens, often appearing in public record searches alongside state filings.

Comparison of Maryland vs. Federal Tax Liens

1. Property Tax Lien

• Filed by: County Tax Collector
• Applies to: Real property (such as land or buildings)
• Duration: Remains in effect until the tax is paid in full or the property is redeemed
• Released by: County Finance Office

2. State Income Tax Lien

• Filed by: Comptroller of Maryland
• Applies to: Both real and personal property
• Duration: Stays active until the tax debt is fully satisfied
• Released by: Comptroller of Maryland

3. Federal Tax Lien

• Filed by: Internal Revenue Service (IRS)
• Applies to: All assets nationwide, including real and personal property
• Duration: Typically remains in place for 10 years
• Released by: Internal Revenue Service

Why Understanding Liens Matters

Knowing how a lien functions helps taxpayers make informed decisions. A recorded lien can affect eligibility for tax credits, impact credit scores, and complicate property transfers. More importantly, ignoring it can lead to foreclosure or wage garnishment. By understanding how liens are filed, individuals can determine the best way to act before the situation worsens.

How Maryland Tax Liens Are Filed

Once a tax debt becomes delinquent, the lien filing process begins. Each step involves specific government offices, legal documentation, and filing requirements that ensure the lien is recorded correctly and enforceable under Maryland law.

Agencies That File Liens

Maryland has multiple agencies responsible for filing tax liens, depending on the type of unpaid tax. Each operates independently but follows similar procedures to secure payment.

1. Comptroller of Maryland: Handles liens for unpaid state income, business, and sales tax. The Comptroller’s office files the lien in the taxpayer’s home county or the county where the company operates.
   
   
2. Local Tax Collectors: Each county and Baltimore City manages property tax liens through their finance or treasury offices. Property taxes that remain unpaid after the due date automatically become liens against the property.
   
   
3. Internal Revenue Service: Although not a Maryland agency, the IRS may file federal tax liens in Maryland circuit courts. These filings protect the federal government’s interest in unpaid federal income or payroll taxes.

Filing Locations and Procedures

A Maryland tax lien is recorded in two places to ensure the government’s claim is publicly recognized and enforceable.

1. Circuit Court Filing: The lien certificate is filed with the circuit court clerk in the taxpayer’s county of residence. Once recorded, the lien functions as a legal judgment, allowing the government to pursue collection actions if payment is not made.
   
   
2. Recorder of Deeds: The lien is also filed with the recorder of deeds, also known as the Department of Land Records. This filing ensures the lien attaches to any real property owned by the taxpayer within that county.
   
   
3. Official Notification: After filing, the taxpayer receives an assessment notice or statement by mail. This document outlines the balance due, the filing date, and the total liability. Sometimes, the lien may also be published in a local newspaper to meet public notice requirements.

Required Forms and Accepted Payments

Taxpayers can settle their lien by submitting payment to the proper agency using an accepted form of payment.

1. Forms: Common forms include IA 1040 (Maryland Individual Income Tax Return) and IA 1040V (voucher used for payments by mail). These forms must be completed accurately to ensure payments are correctly applied to the correct tax year.
   
   
2. Payment Methods: Payments can be made electronically, by certified check, or by money order payable to the Comptroller of Maryland. Taxpayers paying in person should verify that their local tax office accepts their chosen payment method before visiting.
   
   
3. Processing Timeline: Once payment is received, the lien typically takes two to three weeks to be recorded as satisfied. The taxpayer should request written confirmation to verify that the lien will be released and appropriately recorded in both the circuit court and the recorder of deeds offices.

Documentation and Recordkeeping

Maintaining copies of all correspondence and receipts is essential for resolving or verifying a lien. These documents serve as proof of payment and help ensure that your records match those held by the Comptroller of Maryland.

• The original assessment notice and letters from the Comptroller of Maryland should be kept secure. These documents confirm when the lien was filed, the amount owed, and any correspondence regarding payment or status updates.
  
  
• Proof of payment, such as canceled checks or electronic confirmations, must be stored for your records. This evidence demonstrates that payments were made and can be used if discrepancies arise in your account or public records.
  
  
• A copy of the recorded certificate showing the lien’s release or satisfaction should always be retained. This document is critical for confirming that the circuit court has officially released the lien and recorded it with the county’s recorder of deeds.

Keeping these documents allows taxpayers to resolve disputes quickly and provides the necessary evidence if future verification is required.

Effects of a Maryland Tax Lien on Taxpayers

Once a Maryland tax lien is filed, it can significantly affect a taxpayer’s financial stability and legal standing. Understanding these consequences helps individuals act quickly to avoid escalating penalties or long-term economic hardship.

Impact on Property and Credit

A Maryland tax lien immediately becomes a matter of public record, which means it can appear on background checks, credit reports, and property searches. This public record status can limit your ability to sell, refinance, or transfer property ownership until the lien is fully satisfied.

Liens may also prevent homeowners from qualifying for new loans or credit cards. Even after the balance is paid, the lien can take several weeks to be officially recorded as released in court documents. Because of this delay, it is essential to follow up with the Comptroller of Maryland or the circuit court clerk to confirm the updated lien status.

Business Consequences

For individuals who own a business, a tax lien can impact more than personal finances. Businesses with unpaid state or county tax debts may lose good standing with the Maryland Department of Assessments and Taxation. The company cannot obtain state contracts, renew licenses, or apply for tax credits without good standing.

Financial institutions also view a recorded lien as a serious risk. It can prevent approval for business loans, leases, or expansions until the lien is cleared. In severe cases, if the tax debt remains unresolved, the state may seize business assets or income to satisfy the balance.

Legal and Financial Penalties

Tax liens carry financial penalties that increase the longer they remain unpaid. The balance owed accrues interest every week, and additional fees may apply if the lien proceeds to a court judgment. This means a debt of $1,000 can quickly exceed that amount once court costs, filing fees, and interest are added.

If a taxpayer ignores a lien, the state may take further collection actions. These include wage garnishment, property seizure, or intercepting future refunds to cover the unpaid amount. Early action—such as contacting the Comptroller’s office or arranging a payment plan—can prevent these outcomes and reduce additional financial strain.

Options for Lien Removal or Resolution

Maryland law provides several ways to remove or resolve a tax lien, depending on the taxpayer’s circumstances. The correct method depends on the type of tax, the amount owed, and the taxpayer’s ability to make payments.

Full Payment and Release

The most direct way to eliminate a lien is to pay the total balance due, including all interest, penalties, and fees. Once the debt is satisfied, the Comptroller of Maryland or the local tax office issues a certificate of satisfaction confirming that the lien has been released.

After full payment, taxpayers should request written proof that the lien has been cleared. The release must be recorded in both the circuit court and the county’s recorder of deeds to ensure it is officially removed from public records. Verifying that these filings have been updated helps prevent future property sales or credit application complications.

Payment Plans and Installment Agreements

Maryland allows payment plans through the Comptroller’s Compliance Program for taxpayers unable to pay the full balance immediately.

1. Eligibility: Taxpayers must demonstrate financial hardship or temporary inability to pay in full. You must remain in good standing and stay current on future tax filing to qualify.s
   
   
2. Process: Contact the Comptroller of Maryland to discuss available installment options. The taxpayer must submit a completed application form and provide proof of income and expenses to determine a manageable monthly payment.
   
   
3. Documentation: Once the plan is accepted, the taxpayer receives written confirmation that outlines the payment schedule. Missing payments can result in reinstatement of the lien or additional penalties, so it is essential to follow the agreement carefully.

Lien Withdrawal or Subordination

Not all liens must remain on record until the debt is completely paid. In some instances, Maryland allows taxpayers to request lien withdrawal or subordination.

• Lien Withdrawal: This action removes the lien from public records when it has been filed in error, paid in full, or otherwise determined invalid. Withdrawal treats the lien as if it were never recorded, which can improve credit standing and facilitate financial transactions.
  
  
• Lien Subordination: When a taxpayer needs to refinance a mortgage or sell a property, subordination allows another creditor’s claim to take priority. The Comptroller or court may approve subordination if it helps the taxpayer resolve the debt more effectively.

Assistance and Relief Programs

Taxpayers who cannot meet payment obligations may be eligible for assistance. The Office of the State Tax Sale Ombudsman guides property owners at risk of losing their homes to tax sale. This office can help coordinate communication between taxpayers and local county offices to arrange payment plans or identify hardship options.

In addition, some counties offer local relief programs for elderly, disabled, or low-income residents. These programs may reduce the amount due or delay enforcement actions while the taxpayer works toward compliance.

Comparison of Lien Resolution Methods

1. Full Payment

• Eligibility: Available to all taxpayers
• Authority: Comptroller or County Office
• Result: Immediate lien release once payment is confirmed
• Processing Time: Typically 2–3 weeks

2. Payment Plan

• Eligibility: For taxpayers experiencing financial hardship
• Authority: Comptroller of Maryland
• Result: Conditional lien release, dependent on plan compliance
• Processing Time: Usually 4–6 weeks

3. Withdrawal

• Eligibility: When a lien was filed in error
• Authority: Comptroller of Maryland
• Result: The lien record is cleared from public records
• Processing Time: Approximately 6–8 weeks

4. Subordination

• Eligibility: When refinancing or obtaining new financing requires lien priority changes
• Authority: Comptroller of Maryland or the Court
• Result: The lien’s priority is adjusted to allow refinancing
• Processing Time: Determined on a case-by-case basis

Steps to Ensure Proper Release

Once payment or resolution is complete, confirming that the lien has been officially cleared is essential.

• Request written confirmation from the Comptroller or local tax collector that the balance has been satisfied. This document should include the lien’s reference number and release date.
  
  
• Follow up with the circuit court to verify that the release is recorded in the public docket.
  
  
• Check property records with the recorder of deeds to ensure the lien no longer appears in title searches.

Completing these steps ensures the lien is released correctly and your property records accurately reflect your current financial standing.

How to Check, Dispute, or Appeal a Maryland Tax Lien

If you believe a lien has been filed incorrectly or want to verify its current status, Maryland provides clear procedures for checking, disputing, and appealing liens. Taking these steps early can help prevent further penalties or enforcement actions.

Checking Lien Status

Taxpayers can review their lien information through multiple official sources.

1. Maryland Tax Connect: This online system allows searches by taxpayer name, case number, or business name. The system provides key details such as the lien amount, filing date, and whether it has been satisfied. Because updates occur weekly, always confirm any changes directly with the appropriate agency.
   
   
2. Circuit Court Clerk: You may visit or contact your county's circuit court clerk’s office. Court staff can verify lien status and provide certified copies of the recorded certificate upon request.
   
   
3. Recorder of Deeds: Property owners can check the Department of Land Records to confirm whether a lien is still attached to their property. Some counties also provide online access to these records for faster review.

Disputing Incorrect Filings

Lien filings can contain errors due to outdated information, misapplied payments, or administrative mistakes. Taxpayers have the right to dispute these filings directly with the agency responsible.

1. Submit a Written Claim: In writing, contact the Comptroller of Maryland or your county tax office. Include your name, account number, and an explanation of the error. Supporting evidence, such as payment receipts or correspondence, should be attached.
   
   
2. Provide Documentation: If you have already satisfied the debt, include proof such as canceled checks or electronic payment confirmations. If the lien was filed in error, provide the assessment notice or document showing the corrected balance.
   
   
3. Follow Up: Contact the agency within two weeks to confirm that your dispute has been received. Keep copies of all correspondence, as it may be required if the issue escalates to court.

Appealing Through the Courts

Taxpayers may seek relief through the Maryland court system if a lien dispute is not resolved through administrative channels.

• Filing a Motion: You may file a motion to release or vacate a lien with the circuit court in the county where it was recorded. This requires submitting legal documentation demonstrating the lien was filed incorrectly or should have been removed after payment.
  
  
• Court Review: The court will review the evidence and may schedule a hearing. An attorney familiar with Maryland tax law can help ensure all procedural requirements are met.
  
  
• Final Judgment: If the court rules in your favor, it will issue an order directing the Comptroller or local tax office to remove the lien from public records. Once recorded, the lien will no longer appear on your property or credit reports.

Monitoring After Resolution

After the lien has been corrected or released, verifying that all public records reflect the change is essential.

• Check Maryland Tax Connect to confirm that the lien status shows “released” or “satisfied.”
  
  
• Request a copy of the release certificate from the circuit court or recorder of deeds for your records.
  
  
• Update your financial institutions if the lien previously affected your credit or loan eligibility.

Maintaining these confirmations helps ensure the lien is permanently removed and prevents future disputes over your tax status.

Preventing Future Maryland Tax Liens

Preventing a Maryland tax lien is always easier than resolving one. Maintaining consistent filing habits and being aware of your tax obligations can help avoid the costly and time-consuming lien removal process.

File and Pay on Time

The best way to prevent a lien is to file all state income tax forms and pay what you owe by the required deadlines.

1. Timely Filing: Submit your IA 1040 (Maryland Individual Income Tax Return) by the annual due date to avoid late filing penalties. Taxpayers filing electronically often receive refunds within 30 days, while paper filings can take over eight weeks to process.
   
   
2. Reliable Payment: To ensure proper recording, make all payments using a certified check, money order, or electronic transfer. Payments should be made payable to the Comptroller of Maryland, and you should always retain a copy of your payment confirmation.
   
   
3. Avoiding Penalties: Late filing results in a 10 percent failure-to-file penalty, while failure to pay on time adds a 5 percent penalty for each month the balance remains unpaid. If not addressed promptly, these penalties can quickly exceed the original amount owed.

Keep Records and Notices Organized

Staying organized ensures that you never miss an important notice or payment reminder.

• Store all assessment notices and correspondence from the Comptroller of Maryland in a dedicated folder. Each notice contains key information about your tax year, balance due, and payment deadlines.
  
  
• Track payment receipts and confirmations for every transaction. Keeping these documents allows you to verify payments if a dispute or error occurs.
  
  
• Update your mailing address and contact information with the Comptroller’s office. This ensures you receive all official communications, including refund statements or pending lien notices.

Proper organization gives you complete visibility into your tax status and helps you respond promptly if any issue arises.

Seek Professional Assistance

Professional guidance can prevent minor mistakes from becoming major financial problems when facing complex tax issues.

• Consult a tax attorney or certified public accountant (CPA): These professionals can help identify deductions, credits, and compliance strategies that lower your overall tax burden.
  
  
• Contact the Comptroller’s Compliance Program: This office assists taxpayers struggling to pay or needing help setting up a payment plan. Early communication often prevents a lien from being filed.
  
  
• Use trusted resources: Always refer to official state websites such as marylandtaxes.gov or mdtaxconnect.gov for accurate forms, payment options, and agency contact information.

These preventive steps keep you in good standing with the state and ensure your property and financial records remain free from liens or judgments.

FAQs

How can I find out if I have a Maryland tax lien?

You can search your lien status using the Maryland Tax Connect system or by contacting your local circuit court clerk. Both offices can confirm if a lien has been recorded, released, or satisfied. Always verify the lien date, balance, and certificate number. For property liens, your county’s recorder of deeds can also provide copies of recorded documents.

How long does it take for a Maryland tax lien to be released?

After full payment or completion of an approved payment plan, a Maryland tax lien is usually released within two to eight weeks. The Comptroller of Maryland issues a certificate of satisfaction that must be filed with the circuit court and recorder of deeds. Once recorded, the lien is officially cleared from public records and should no longer affect your credit or property status.

Can I sell or refinance my property if a Maryland tax lien exists?

Yes, but the lien must be satisfied before completing the transaction. Any unpaid balance, including accrued interest and fees, must be paid from the sale proceeds. The circuit court or county office requires proof of payment before recording the property transfer. Buyers and lenders generally refuse to proceed until the lien is released and confirmed in writing.

Does a Maryland tax lien affect my credit and refund eligibility?

Yes, a recorded lien can appear on your credit report and lower your credit score, affecting loan approval or interest rates. In addition, the Comptroller of Maryland can apply future income tax refunds to the outstanding lien balance. Once the lien is paid and officially released, you can request that credit agencies update your report to reflect the corrected status.

Are there programs or offices that assist Maryland taxpayers with liens?

The Office of the State Tax Sale Ombudsman assists homeowners facing property liens or tax sales. You can also contact the Comptroller of Maryland’s Compliance Program for help setting up payment plans or disputing incorrect filings. These offices can determine your eligibility for hardship programs, help you submit necessary forms, and ensure your lien is resolved correctly and promptly.