DC

Sales Tax

  • District-wide: 6.0%
  • Current average sales tax (with local taxes included): 6.0%
  • Common Exceptions:
    • Prescription and Over-the-Counter Medicine: Exempt
    • Unprepared Foods: Exempt
    • Prepared Foods: 10%
  • Gasoline Tax: 52.20 cents/gallon (Includes all state, local, and federal taxes)
  • Diesel Fuel Tax: 58.20 cents/gallon (Includes all state, local, and federal taxes)

 

Personal Income Tax

  • Personal Income Tax Rate Range: Seven brackets from 4.0% to 10.75% on income over $1,000,000
  • Standard deduction: Single Filing Status: $12,950. Married Filing Jointly $25,900. Additional deduction of $1,350 if 65 and over or blind.
  • Personal Exemption Allowance: None
  • Itemized Deductions Allowed? Yes, if itemized on federal return. Subject to limitations.
  • Retirement Income
    • Social Security: Exempt
    • 401Ks/Defined contribution employer retirement plans: Taxable at ordinary income tax rates
    • Private pensions: Taxable at ordinary income tax rates
    • Public Pensions: Up to $2,000 exempt on in-state pensions; remainder is taxable at ordinary income tax rates
  • Military Pay
    • Active Duty Pay: Taxable at ordinary income tax rates.*
    • Military Retirement Pay: Exemption of up to $3,000 available if 62 and older.
    • Military Disability Pay: Exempt
    • VA Disability Dependency & Indemnity Compensation Benefits: Exempt
    • SBP/SSBP/RCSBP/RSFPP: Exempt if beneficiary is over 62. 

 

Property Tax

  • Local municipalities average .56% of the property's assessed value.
  • Calculation of assessed value: 100% of fair market value. Current tax rate is $0.85 per $100. An assessment cap credit is automatically rewarded of any tax resulting from an increase of more than 10% (5% for seniors or disabled) of assessed value every year. 
  • Relief programs for:
    • Homeowner Property Tax Credit: Up to $1,225 tax credit. Income restrictions apply (AGI cannot exceed $56,200 under age 70 or $76,700 age 70 or older).
    • Homestead Exemption: Reduction of up to $76,350 of assessed value is available.
    • 65 and over or Disabled: Reduces property tax 50% if meet requirements. Deferral programs also available. Any increase might be capped at 2%
    • Low-income/Senior over 70: If property tax is over 3% of income, may receive credit for amount over 3%. Maximum credit is $1,200. Available to renters also. Abatement program also available.
    • Personal Property Tax: Yes. Rates and exemptions vary.

 

Inheritance & Estate Taxes: Estates over $4,254,800 ($4,528,800 as of Jan. 1, 2023) can pay a tax from 11.2% to 16%. 

 

Department of Revenue website: www.otr.cfo.dc.gov

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