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Tax Rates and Revenues, Individual Income and Business Taxes

Individual Income and Business Taxes

The taxable income of an individual who is domiciled in the District at any time during the tax year, or who maintains an abode in the District for 183 or more days during the year.

DC Code Citation: Title 47, Chapter 18.

Current Tax Rate(s)

  • First $10,000 = 4.0%
  • $10,000 less than or equal to $40,000 but less than or equal to $100,000 = $400 + 6.0% of excess above $10,000
  • More than $40,000 = $2,200 + 8.5% of excess above $40,000
  • Over $350,000 = $28,550 + 8.95 percent of excess above $350,000

Note: Excludes Social Security income and maximum $3,000 exclusion on military retired pay, pension income, or annuity income from DC or federal government.

Corporate Franchise Tax

Net income of corporations having nexus in the District. All corporations engaging in a trade, business or profession in the District of Columbia must register.

DC Code Citation: Title 47, Chapter 18.

Current Tax Rate(s)

The franchise tax rate is 9.975% of taxable income, a 9.5% base rate plus a 5% surtax on the base rate.

  • $250 minimum tax, if DC gross receipts are $1 million or less
  • $1000 minimum tax, if DC gross receipts are more than $1 million

Unincorporated Business Franchise Tax

Net income of unincorporated businesses with gross receipts more than $12,000. A 30% salary allowance for owners and a $5,000 exemption are deductible from net income to arrive at taxable income.

A business is exempt if more than 80% of gross income is derived from personal services rendered by the members of the entity and capital is not a material income-producing factor. A trade, business or professional organization that by law, customs or ethics cannot be incorporated is exempt.

DC Code Citation: Title 47, Chapter 18.

Current Tax Rate(s)

The franchise tax rate is 9.975% of taxable income, a 9.5% base rate plus a 5% surtax on the base rate.

  • $250 minimum tax,  if DC gross receipts are $1 million or less
  • $1000 minimum tax, if DC gross receipts are greater than $1 million