District of Columbia Tax Filing & Tax Refunds
Full and part time residents of Washington DC who are required to file DC taxes will need to file state tax returns. Partial-year residents have moved into or moved out of the District of Columbia during the tax year. Nonresidents who lived in the District for at least 183 days during the year will need to file individual returns to the D.C. Office of Tax and Revenue (OTR). Likewise, military personnel who list DC as their permanent home are required to file individual returns.
Five Tier Tax Rates
The D.C. tax rates for filers are based on a five-tier schedule, starting at 4% for the first $10,000 followed by 6% for amounts ranging from $10,001 to $40,000. The rate rises to 7% for the next tier, starting at $40,001 up to $60,000 and 8.5% for amounts between $60,000 to $350,000. Any amount exceeding $350,000 is taxed at 10.75%.
DC also imposes an 8.25% corporate income tax rate on businesses operating in the district.
Income calculations exclude Social Security income and up to $3,000 dollars in military retirement pay, pension or annuity incomes.
Standard deductions apply with amounts varying depending on your filing status. For instance, the head of household deduction is $4,150, which is the same amount as the deduction for single filers and married taxpayers filing jointly. The amount goes down to $2,075 for married taxpayers filing DC taxes separately.
Filing a D.C. Tax Return and Amending:
Forms D-40 or D-40EZ, used for filing an individual income tax return, can be downloaded from the District's OTR website as well as instructions for all filers. Returns may be amended using Form D-40 and checking the box for amended returns. Amended returns with a payment for tax liability should be sent to:
Office of Tax and Revenue
PO Box 96169
Washington, DC 20090-6169
Amendments with an anticipated refund should go to:
Office of Tax and Revenue
PO Box 9614
Washington, DC 20090-6145
Filing Requirements
You must file a DC tax return if you meet any of these criteria:
- You were a DC resident and required to file a federal tax return
- Your permanent residence was in DC for part or all of the taxable year
- You maintained a place of residence in DC for 183 days or more during the tax year
- You are a member of the US armed forces with DC as your home of record
Unable to Meet the Deadline?
Taxpayers who are unable to meet the filing deadline can turn in FR-127 before the April 15 deadline along with full payment of tax liabilities less any credits. The OTR will not accept a copy of the federal form requesting filing extension as a replacement for FR-127.
The District's federal/state e-file system
D.C. tax returns can also be filed electronically with federal and state forms submitted to the IRS together through the District's federal/state e-File program.
To track the status of your returns and anticipated D.C. tax refunds, go to Taxpayerservicecenter.com/individual/Ind_RefundStatus_Logon.jsp where you can check your refund status online using your Social Security number and refund amount.
DC Tax Environment
The District of Columbia has one of the highest individual income tax rates in the nation, with a top rate of 10.75%. DC also has a 6% sales tax rate with no additional local sales taxes. The effective property tax rate is approximately 0.57% on owner-occupied housing.
DC collects $13,275 per capita in tax collections, ranking it among the highest in the country for per-capita tax collections. The district's tax system ranks 48th overall on the State Tax Competitiveness Index.
Withholding Arrangements
Withholding amounts from earnings ensure that taxpayers are compliant with rules specifying that taxes are due as income is earned. Taxpayers who do not have a withholding arrangement will need to complete Form D-40ES for estimated tax vouchers. Payments are scheduled quarterly and may be transmitted online. Underpayment of estimated taxes will result in a 10% interest penalty compounded daily. Other failure-to-pay penalties may also apply.
Frequently Asked Questions
Do I have to file a DC tax return if I live in another state?
You must file a DC tax return if you maintained a place of residence in DC for 183 days or more during the tax year, even if your permanent home was in another state.
What is the 183-day rule in DC?
The 183-day rule means that if you maintain a place of residence in DC for an aggregate of 183 days or more during the tax year, you're considered a statutory resident for tax purposes and must file a DC return.
Does DC tax out-of-state income?
Yes, DC residents must report all income on their DC tax return, including income earned outside the district. However, you may receive credit for taxes paid to other states.
Are there any income exemptions in DC?
Yes, Social Security benefits are exempt from DC income tax. Military retirement pay is also exempt up to $3,000, and pension and annuity income may qualify for exemptions.
Note: States & U.S. territories may make changes to their tax laws with little notice. We do our best to keep this information up-to-date, but it is provided on an "AS IS" basis. For more see our terms.