Tool | November 2017

State-by-State Guide to Taxes on Retirees

District Of Columbia

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The Bottom Line
Map of District Of Columbia

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.

IRAs

Taxable at ordinary income tax rates.

401(k)s and Other Defined-Contribution Employer Retirement Plans

Taxable at ordinary income tax rates.

Private Pensions

Taxable at ordinary income tax rates.

Public Pensions

All 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.