District of Columbia income tax guide for individuals and businesses
A plain-English overview of District of Columbia individual and business taxes for 2026: rates, forms, deadlines, sales tax, payroll and multi-state rules, with CPA help when you need it.
District of Columbia at a glance
| Individual income tax | Graduated, top rate about 10.75% |
|---|---|
| Main resident return | Form D-40 |
| Business taxes | Corporate franchise tax, about 8.25%. Unincorporated businesses also pay an unincorporated business franchise tax. |
| Sales tax | About 6% state rate |
| Individual return due | April 15 |
| Tax agency | DC Office of Tax and Revenue |
| Wage reciprocity | Maryland, Virginia |
Individuals
District of Columbia has a graduated individual income tax (about 10.75% at the top). Residents generally file Form D-40 and start from their federal income.
Nonresidents and part-year residents who earn income from District of Columbia sources (for example wages for work performed in District of Columbia, rental property or a business here) generally file the nonresident or part-year version of the return or a schedule. Your home state normally gives a credit for tax paid to District of Columbia, so the same income is rarely taxed twice.
Good to know: DC does not tax the wages of nonresidents who work in DC, which makes DC unlike any state for commuters from Maryland and Virginia.
Businesses
Entity-level taxes: Corporate franchise tax, about 8.25%. Unincorporated businesses also pay an unincorporated business franchise tax.
Pass-through businesses. S corporations, partnerships and most LLCs pass income to their owners, who report it on personal returns. Many states, including a large number of those that tax income, offer an elective pass-through entity tax (PTET) that can help work around the federal limit on deducting state taxes. Ask us whether it fits District of Columbia and your situation.
Sales tax. About 6% state rate. After the Wayfair decision, out-of-state sellers can owe sales tax once their sales into District of Columbia pass the state's threshold, even with no office there.
Payroll. Employers must register for state income tax withholding (where the state has an income tax) and for state unemployment insurance before the first payroll, and report new hires. Workers' compensation insurance is also required in most cases.
Annual filings. Most states also require corporations and LLCs to file a yearly report or pay a fee to the Secretary of State.
Working in more than one state
District of Columbia has wage reciprocity agreements with Maryland, Virginia. A resident of a partner state who works in District of Columbia can generally file an exemption certificate with the employer so no District of Columbia tax is withheld.
Working or living in more than one state, or moving during the year? See our multi-state tax guide.
Compliance calendar snapshot
| When | What |
|---|---|
| January 15, April 15, June 15, September 15 | Federal estimated tax payments. Most states with an income tax follow similar dates. |
| April 15 | District of Columbia individual return due date (calendar-year filers) |
| Monthly or quarterly, usually the 20th of the next month | State sales tax returns and payroll withholding deposits, depending on volume |
| Quarterly (end of month after quarter) | State unemployment insurance and withholding reconciliation returns |
| Yearly, on the entity's anniversary or by a fixed date | Secretary of State annual report or franchise fee |
Common questions
What is the District of Columbia income tax rate for 2026?
District of Columbia has graduated rates with a top rate of about 10.75%. Rates, brackets and credits change, so confirm with the DC Office of Tax and Revenue.
Which form do I file for District of Columbia income tax?
Residents generally file Form D-40. Nonresidents and part-year residents use the nonresident or part-year version or a schedule. The state agency's website has the current forms and instructions.
Do I need to file a District of Columbia return if I live in another state?
If you earned income from District of Columbia sources (wages for work performed here, rental property, or a business or partnership interest), you may need to file in District of Columbia even if you live elsewhere. Your home state usually gives a credit for tax paid to another state.
Does District of Columbia have reciprocity with other states?
Yes, for wages with Maryland, Virginia. Reciprocity applies only to wages and there are exceptions, so confirm before you stop withholding.
What business taxes apply in District of Columbia?
Corporate franchise tax, about 8.25%. Unincorporated businesses also pay an unincorporated business franchise tax. Sales tax, payroll withholding and unemployment insurance may also apply.
General information only, for tax year 2026. Rates, forms and rules change and have many exceptions. Confirm with the state agency or contact us before you act. Rates shown are approximate top or flat rates.
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