District of Columbia tax guide: Overview
From a tax standpoint, the District of Columbia has a progressive income tax structure that gets steep quickly, but the top rate of 10.75% is reserved for taxable income over $1 million.
The sales tax in the Nation's Capital of 6% is modest, and there are property tax breaks available for many retirees. However, Washington D.C. imposes an estate tax.
[Data for this state tax guide was gathered from a number of sources including the Census Bureau, the state’s government website, the Sales Tax Handbook, and the Tax Foundation. Property taxes are cited as a rate percentage rather than the assessed value.]
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District of Columbia income taxes
District of Columbia taxes in retirement: Social Security retirement and Railroad Retirement benefits are tax-exempt in Washington D.C. However, military retirement pay is fully taxable.
District of Columbia Income Tax Range
| Up to $10,000 | 4% of taxable income |
| $10,001 to $40,000 | 6% of the excess over $10,000 |
| $40,001 to $60,000 | 6.5% of the excess over $40,000 |
| $60,001 to $250,000 | 8.5% of the excess over $60,000 |
| $250,001 to $500,000 | 9.25% of the excess over $250,000 |
| $500,001 to $1 million | 9.75% of the excess above $500,000 |
| More than $1 million | 10.75% of the excess above $1 million |
District of Columbia sales tax
Washington, DC has a 6% city sales tax.
- Groceries are tax-exempt.
- Prescription drugs are tax-exempt.
How much are property taxes in the District of Columbia?
In the District of Columbia, the average effective property tax rate is 0.57%, which is lower than in most states. Even so, homeowners face high median property tax bills, due in part to high home prices.
District of Columbia Property Tax Breaks for Retirees
Homeowners of all ages might qualify for Washington D.C.'s homestead exemption, but eligible homeowners 65 and older may also be able to reduce their property tax by 50%. For 2023 property tax reductions, the total 2021 federal adjusted gross income of everyone living on the property, excluding tenants, must be less than $149,400. Applicants must also have at least 50% ownership of the property and reside at the property to qualify.
District of Columbia gas taxes (motor fuel)
Gasoline: $0.235 per gallon.
Diesel: $0.235 per gallon.
District of Columbia taxes on alcohol and tobacco
| Product | Amount |
|---|---|
| Cigarettes | $5.03 per pack of 20 |
| Beer | $0.09 per gallon |
| Wine | $0.30 per gallon |
| Wine (sparkling) | $0.45 per gallon |
| Liquor | $1.50 per gallon |
District of Columbia estate and inheritance taxes
For 2023, Washington, D.C. estates valued over $4,528,800 are subject to a city estate tax. Rates in 2023 range from 11.2% to 16%.
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