Go to Retiree Tax Map District Of Columbia Add to State Compare List | View List View State Compare List (0) selected | Compare up to 5 The Bottom Line Mixed Tax Picture Although the District exempts Social Security income, a steep 8.5% tax rate hits other income over $40,000. (The top income tax rate of 8.95% hits taxable income over $350,000.) Senior homeowners under certain income thresholds may qualify for property tax breaks, and property taxes are fairly low on average. State Sales Tax 5.75% Income Tax Range Low: 4% (on taxable income up to $10,000)High: 8.95% (on taxable income above $1,000,000)Effective income tax rate: 5.5%/individual, 7.3%/joint Social Security Benefits are not taxed. Exemptions for Other Retirement Income The district doesn't offer exemptions on other retirement income.IRAsTaxable at ordinary income tax rates.401(k)s and Other Defined-Contribution Employer Retirement PlansTaxable at ordinary income tax rates.Private PensionsTaxable at ordinary income tax rates.Public PensionsAll state government pensions are fully taxed. Property Taxes The median property tax on the District of Columbia's median home value of $486,900 is $2,614.Tax breaks for seniors: Homeowners 65 and older with household adjusted gross income of less than $128,950 can qualify to reduce their property tax by 50%. Homeowners 65 and older whose adjusted gross income is less than $50,000 may qualify for property tax deferral. Inheritance and Estate Taxes Estates valued over $2 million are subject to estate tax. Rates range from 8% to 16%. D.C. is seeking to match its exemption to the federal level, but decides each year if tax revenues are high enough to justify an increase. There is no inheritance tax.