Washington DC has a local income tax, even though it is not a state

Washington DC collects income tax from residents and workers, even though DC is not a state. The tax is administered by the DC Office of the Chief Financial Officer, and the rates and rules are separate from federal income tax. If you live or work in DC, you will owe DC income tax on wages, self-employment income, and other earnings—regardless of whether you also owe federal tax.

DC's income tax system works similarly to state income tax in other places. You file a DC tax return, claim deductions and credits, and pay tax on your income at DC rates. The money funds DC schools, roads, public safety, and other local services. DC residents also pay federal income tax to the IRS, so you will file both a DC return and a federal return each year.

Key Takeaways

  • Washington DC collects income tax on wages and self-employment income at rates ranging from 4 percent to 9.75 percent, depending on your income level.
  • You must file a DC tax return if you lived in DC for any part of the tax year and earned income, even if you also file a federal return.
  • DC offers a standard deduction and tax credits similar to federal tax, including a child and dependent care credit and an earned income tax credit.
  • If you work in DC but live in another state or jurisdiction, you may owe DC tax on wages earned in DC, though your home state may offer a credit to avoid double taxation.
  • DC tax returns are filed with the DC Office of the Chief Financial Officer, not the IRS, and the important date is the same as the federal important date—usually April 15.

DC income tax rates and brackets for 2024

DC uses a progressive tax system with seven tax brackets. Your rate depends on your total income for the year. The rates range from 4 percent on the lowest incomes to 9.75 percent on the highest. The exact dollar amounts where each bracket begins change each year, so you will need to check the current year's brackets when you file.

For example, a single filer in 2024 pays 4 percent on income up to a certain threshold, then 6 percent on the next portion of income, and so on, up to 9.75 percent on income above the highest bracket. If you are married filing jointly, the income ranges are wider, so you pay tax at each rate on a larger amount of income before moving to the next bracket. The DC Office of the Chief Financial Officer publishes the exact brackets each year on its website.

Who must file a DC tax return

You must file a DC return if you lived in DC for any part of the tax year and had income above the standard deduction. The standard deduction amount varies by age and filing status—it is higher for people age 65 and older. Even if your income is below the standard deduction, you may want to file if you had taxes withheld from your paychecks, because filing allows you to claim a refund.

If you worked in DC but lived in another state or jurisdiction for the entire year, you may still owe DC tax on the wages you earned in DC. However, your home state may offer a credit for taxes paid to DC, so you do not pay tax twice on the same income. The rules vary by state, so check with your home state's tax authority about how they handle DC income.

DC tax deductions and credits you may use

DC allows you to claim a standard deduction or itemize deductions, similar to federal tax. The standard deduction is the simpler route for most people—you subtract that amount from your income, and you owe tax only on what remains. If you have large deductible expenses like mortgage interest or charitable donations, you may benefit from itemizing instead, but you will need to keep records and do more detailed math.

DC also offers tax credits that reduce the tax you owe dollar-for-dollar. The DC Earned Income Tax Credit is available to lower-income workers and can result in a refund even if you owe no tax. The Child and Dependent Care Credit helps offset the cost of childcare or care for an elderly parent. Other credits may be available depending on your situation—the DC Office of the Chief Financial Officer publishes a full list each year.

How to file your DC tax return

You can file your DC return by mail, online, or through a tax professional. The DC Office of the Chief Financial Officer accepts paper returns mailed to their address, which you can find on their website. Many people file online using tax software that supports DC returns—the software walks you through questions about your income, deductions, and credits, then generates your return for you.

If you use a tax professional—a CPA, enrolled agent, or tax preparer—they will handle the filing for you. The important date to file is usually April 15, the same as the federal important date. If you cannot file by that date, you can request an extension, which gives you until October 15 to file. An extension does not extend the time to pay tax you owe, so if you expect to owe money, pay what you estimate by April 15 to avoid penalties and interest.

DC tax withholding from your paycheck

If you work in DC, your employer should withhold DC income tax from your paycheck. You tell your employer how much to withhold by completing a DC Form W-4, which is separate from the federal W-4. If you have multiple jobs, work part-time, or have a spouse who also works, you may need to adjust your withholding so that the right amount is taken out over the year.

If too much tax is withheld, you will receive a refund when you file your return. If too little is withheld, you will owe tax when you file. You can adjust your withholding at any time by giving your employer a new DC Form W-4. If you are self-employed, you do not have an employer to withhold tax, so you will need to make estimated tax payments to DC four times a year, usually in April, June, September, and January.

DC tax for non-residents who work in the district

If you live outside DC but work in DC, you owe DC tax on the wages you earn in DC. You will file a DC non-resident return and report only the income you earned in DC, not income from other sources or other states. Your home state may offer a credit for taxes paid to DC, which reduces the tax you owe to your home state, so you do not end up paying tax on the same income twice.

The rules for non-resident taxation vary by state. Some states offer a full credit for DC taxes paid, while others offer a partial credit or none at all. Before you file, check your home state's tax authority website or speak with a tax professional to understand how your state treats DC income. This is especially important if you live in a state with high income tax, because the credit may not cover all the tax you owe at home.

Frequently Asked Questions

Do I have to pay DC income tax if I live in Maryland or Virginia but work in DC?

Yes, you owe DC tax on the wages you earn in DC. However, Maryland and Virginia both offer credits for taxes paid to DC, so you may not pay tax twice on the same income. File a DC non-resident return reporting only your DC wages, then claim the credit on your home state return. The credit amount varies, so check your state's rules.

What is the DC standard deduction for 2024?

The standard deduction varies by filing status and age. The DC Office of the Chief Financial Officer publishes the exact amounts each year on its website. Generally, the standard deduction is higher for people age 65 and older and for married couples filing jointly than for single filers. Check the current year's tax forms to find the amount that applies to you.

Can I file my DC return online?

Yes. The DC Office of the Chief Financial Officer accepts online returns through tax software that supports DC. Many commercial tax software products include DC, and some free options are available through the IRS Free File program. You can also file by mail or hire a tax professional to file for you.

What happens if I do not file a DC tax return?

If you owe DC tax and do not file, the DC Office of the Chief Financial Officer may assess penalties and interest on the unpaid tax. If you are owed a refund but do not file, you will not receive it. If you missed a important date, you can still file a late return—the sooner you file, the sooner any refund will be processed.

Is DC income tax deductible on my federal return?

DC income tax is deductible on your federal return only if you itemize deductions instead of taking the standard deduction. You can deduct state and local income taxes (SALT) up to a limit of $10,000 per year. If your total state and local taxes are below that limit, you can deduct all of them. If they exceed $10,000, you can deduct only $10,000.