Tool | November 2018

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.) 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.

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 $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%.

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