A 1099-C would be included in the AGI of your federal return. Most states start their returns with the AGI from the Federal return. I found nothing to indicate that the 1099-C would not be taxed by Maryland. Looking over the State of Maryland's income tax form I do not find a category under the subtraction section that would cover subtracting out the 1099-C. Based on this, the 1099-C is taxable on your Maryland state return.
