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.) But many senior homeowners can get a substantial property tax break. Sales taxes are modest. 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) 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 $506,100 is $2,811.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. Vehicle Taxes Drivers pay an excise tax — when a new vehicle is first registered in the District — that ranges from 6% to 8%, depending on the vehicle’s weight. Inheritance and Estate Taxes Estates valued over $5.6 million are subject to estate tax. Rates range from 8% to 16%.