If you live in the District of Columbia, you pay a progressive DC income tax with seven brackets running from 4 percent on the first $10,000 of taxable income to 10.75 percent on income above $1 million. The District starts from your federal adjusted gross income, then applies its own standard deduction, credits, and adjustments to reach your local bill. Several pieces of that math changed for tax year 2025, including a decoupled standard deduction and a larger local Earned Income Tax Credit.
Rates and Brackets for 2025 and 2026
DC’s seven brackets apply to taxable years beginning after December 31, 2021, and remain in effect for both the 2025 return you file in April 2026 and the 2026 tax year.1D.C. Law Library. District of Columbia Code 47-1806.03 – Tax on Residents and Nonresidents — Imposition and Rates
- Up to $10,000: 4 percent
- $10,001 to $40,000: $400 plus 6 percent of the amount over $10,000
- $40,001 to $60,000: $2,200 plus 6.5 percent of the amount over $40,000
- $60,001 to $250,000: $3,500 plus 8.5 percent of the amount over $60,000
- $250,001 to $500,000: $19,650 plus 9.25 percent of the amount over $250,000
- $500,001 to $1,000,000: $42,775 plus 9.75 percent of the amount over $500,000
- Over $1,000,000: $91,525 plus 10.75 percent of the amount over $1,000,000
Each rate applies only to income within its bracket, not to your whole paycheck. On $70,000 of taxable income, you pay 4 percent on the first $10,000, 6 percent on the next $30,000, 6.5 percent on the next $20,000, and 8.5 percent only on the final $10,000.
Who Counts as a DC Resident
You owe DC income tax if you meet either of two tests. The first is domicile: if your permanent legal home is in the District, you’re a resident no matter how much time you spend elsewhere. The second is physical presence: if you kept a place to live in DC for 183 days or more during the tax year, DC treats you as a statutory resident even if your permanent home is somewhere else. Moving into DC with the intent to make it your home triggers resident status immediately, without waiting on the 183-day count.
One narrow carve-out: under 4 U.S.C. § 113, a Member of Congress who keeps a DC residence solely to attend sessions cannot be treated as a DC resident for income tax, and their congressional pay cannot be taxed by the District. The exemption extends to delegates from DC, Guam, the U.S. Virgin Islands, and the Resident Commissioner from Puerto Rico. It does not cover congressional staff, who are subject to DC income tax under the normal residency rules if they live in the District.
The Standard Deduction Changed in 2025
DC decoupled from several provisions of the federal One Big Beautiful Bill Act, including the increased federal standard deduction.2Council of the District of Columbia. Council Separates Elements of District Tax Code from the Federal, Funds Family Tax Savings and Child Tax Credit, Reinstates Temporary Juvenile Curfew For tax year 2025, DC uses its own “basic standard deduction” amounts:
- Single or married filing separately: $15,000
- Head of household: $22,500
- Married filing jointly or surviving spouse: $30,000
Starting with tax year 2026, these figures adjust annually for cost of living. If itemizing beats the standard deduction for you, you’ll need records of expenses like property taxes and charitable contributions.
Credits That Reduce What You Owe
Several DC credits cut your bill directly, and some are refundable, meaning you get the money even when your tax liability is zero.
Earned Income Tax Credit
The DC EITC now equals 100 percent of your federal EITC, up from the previous 40 to 70 percent match.3Office of the Chief Financial Officer. DC EITC If your federal EITC is $3,000, DC adds another $3,000. You have to file a DC return and claim the federal credit to receive the local match.
Child Tax Credit
Beginning with tax year 2026, DC has a local child tax credit of up to $1,000 per dependent child under 18. It’s fully refundable with no cap on the number of children. Eligibility is capped by income: single filers earning under $75,000, couples under $90,000.2Council of the District of Columbia. Council Separates Elements of District Tax Code from the Federal, Funds Family Tax Savings and Child Tax Credit, Reinstates Temporary Juvenile Curfew
Schedule H Property Tax Credit
Both homeowners and renters can claim a property tax credit on Schedule H. For 2025, your total household income must be $68,000 or less, or $90,000 if you are 70 or older. The maximum credit is $1,425.4Office of Tax and Revenue. 2025 Schedule H Homeowner and Renter Property Tax Credit Renters qualify because DC treats a portion of rent as an indirect property tax payment.
529 College Savings Deduction
Contributions to the DC College Savings Plan are deductible up to $4,000 per account owner per year. Married couples filing jointly can each deduct up to $4,000 if each spouse owns an account. Contributions above $4,000 in a year carry forward as a deduction for up to five years.5D.C. Law Library. District of Columbia Code – Chapter 45 – College Savings Program
DC also offers the Keep Child Care Affordable Tax Credit for eligible child care expenses, and a deduction for long-term care insurance premiums under the Long-Term Care Insurance Tax Deduction Act.
Reciprocity with Maryland and Virginia
DC has reciprocal tax agreements with Maryland and Virginia. If you live in DC and earn wages in either state, you owe income tax only to DC. If you live in Maryland or Virginia and commute into DC for work, you’re exempt from DC tax on those wages.
The place this breaks down is withholding. If your employer sends your income tax to the wrong jurisdiction, you have to file a return in that state to get the money back; you can’t fix it with a credit on your DC return. Check with payroll when you start a new job to make sure the right state is on file.
Filing Your Return
DC residents file Form D-40, which uses your federal adjusted gross income as its starting point. From there, DC-specific additions and subtractions produce your local taxable income.
The fastest option is the MyTax.DC.gov electronic portal. E-filing gives you immediate confirmation that the Office of Tax and Revenue received your return, and refunds process more quickly.6Office of Tax and Revenue. Individual Income Tax Forms
The deadline for tax year 2025 returns is April 15, 2026. When that date falls on a weekend or legal holiday, it moves to the next business day.
Need more time? File Form FR-127 by April 15 for a six-month extension to October 15. An extension is only for filing, not paying: anything you owe is still due by April 15, and interest runs on unpaid balances from that date regardless.7MyTax DC. Instructions for Form FR-127
Estimated Payments If You’re Self-Employed
If you expect to owe $100 or more in DC income tax after withholding and credits, you have to make quarterly estimated payments using Form D-40ES. This typically catches self-employed people, freelancers, and anyone with significant income that isn’t subject to employer withholding.
Due dates for tax year 2026:
- Voucher 1: April 15, 2026
- Voucher 2: June 15, 2026
- Voucher 3: September 15, 2026
- Voucher 4: January 15, 2027
You avoid underpayment interest if your total payments equal at least 90 percent of your 2026 tax or 110 percent of your 2025 DC tax for a twelve-month period.8Office of Tax and Revenue. 2026 D-40ES Estimated Payment for Individual Income Tax If a due date falls on a weekend or holiday, the payment is due the next business day.
Penalties and Interest for Late Filing or Payment
DC stacks penalties and interest separately, and they add up quickly.
The penalty for failing to file or failing to pay on time is 5 percent of the unpaid tax per month, up to 25 percent.9D.C. Law Library. District of Columbia Code 47-4213 – Failure to File Return or to Pay Tax That 25 percent cap applies to each penalty separately, so filing late and paying late can run the combined penalty to 50 percent of what you owe. OTR can waive the penalty for reasonable cause rather than willful neglect, but the bar is high.
On top of the penalties, DC charges interest at 10 percent per year, compounded daily, on any tax not paid by the original due date. Interest keeps accruing even with an approved filing extension. Filing on time and paying what you can beats waiting, because filing stops the failure-to-file penalty from running.
If DC Was Withheld From Your Pay by Mistake
If you live outside DC and your employer withheld DC income tax anyway, claim a refund by filing Form D-40B. You qualify as a nonresident if your permanent home was outside DC for the entire tax year and you didn’t keep a place to live in the District for 183 days or more.10Office of Tax and Revenue. Nonresident Request for Refund – D-40B
Attach all W-2s and 1099s showing DC withholding to the front of the form. Joint refund requests aren’t permitted; each spouse files separately. If OTR reviews your filing and decides you actually qualify as a DC resident, you’ll be required to file a full D-40 instead.