Does Washington DC Have State Income Tax?
Explore the unique tax structure of the District of Columbia, where residency, not place of work, determines your local income tax liability.
While Washington, D.C. is a federal district and not a state, its residents are subject to a local income tax. This tax operates in a similar manner to state-level income taxes across the country. The District of Columbia has its own tax authority, the Office of Tax and Revenue (OTR). The existence of a D.C.-specific income tax is a result of the District of Columbia Home Rule Act, which granted the city power over local matters, including taxation.
District of Columbia Income Tax Rates
The District of Columbia employs a progressive tax system. Before applying tax rates, taxpayers can reduce their taxable income by taking either a standard deduction or itemized deductions. For the 2024 tax year, the standard deduction amounts are $14,600 for single filers and those married filing separately, $21,900 for head of household filers, and $29,200 for married couples filing jointly and qualifying widow(er)s.
Once taxable income is determined, the following marginal tax rates for the 2024 tax year apply:
- Taxable income up to $10,000: 4%
- Taxable income from $10,001 to $40,000: 6%
- Taxable income from $40,001 to $60,000: 7%
- Taxable income from $60,001 to $250,000: 8.5%
- Taxable income from $250,001 to $500,000: 9.75%
- Taxable income from $500,001 to $1 million: 10.25%
- Taxable income over $1 million: 10.75%
Who is Required to Pay DC Income Tax
The requirement to pay D.C. income tax is primarily based on residency. An individual is considered a D.C. resident for tax purposes if their permanent home is in the District, or if they live in the District for 183 days or more during the tax year. If a person meets these residency requirements and is also required to file a federal income tax return, they must file a D.C. tax return.
A distinction exists for individuals who work in Washington, D.C. but reside in other states, such as Maryland or Virginia. Federal law prevents the District from imposing an income tax on the wages and salaries of non-residents. Therefore, these commuters pay income tax to their state of residence, not to the District of Columbia. This rule specifically applies to wage income; non-residents may still have a D.C. filing obligation if they earn other types of income from sources within the District.
Members of the armed forces are another specific group whose tax obligations are determined by their “home of record” or state of legal residence. A service member whose home of record is the District of Columbia is required to file and pay D.C. income taxes, regardless of where they are stationed. Conversely, a service member stationed in D.C. whose legal residence is another state is not required to pay D.C. income tax on their military pay.
Filing a DC Tax Return
Residents who are required to file a D.C. income tax return must use Form D-40, the Individual Income Tax Return. The D.C. return begins with the federal adjusted gross income, which is then modified by specific D.C. additions and subtractions.
Taxpayers have multiple options for submitting their return. The OTR encourages electronic filing through its own online portal, MyTax.DC.gov, or through approved tax preparation software vendors. Alternatively, taxpayers can mail a paper return to the address specified in the Form D-40 instructions.
The standard deadline for filing a D.C. tax return is April 15, mirroring the federal deadline. If a payment is due, it should be made payable to the “DC Treasurer” and can be submitted electronically or by mailing a check or money order with a payment voucher. If a filer cannot pay the full amount owed, the OTR offers options for setting up a payment plan.