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District of Columbia Tax Rates, Individual Income and Business Franchise 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.

Tax Year 2016 Rate

New tax rates. The tax rates for individuals for tax years beginning after 12/31/2015 are:

If the taxable income is: The tax is:
Not over $10,000 4% of the taxable income
Over $10,000 but not over $40,000 $400, plus 6% of the excess over $10,000.
Over $40,000 but not over $60,000 $2,200, plus 6.5% of the excess over $40,000.
Over $60,000 but not over $350,000 $3,500, plus 8.5% of the excess over $60,000.
Over $350,000 but not over $1,000,000 $28,150, plus 8.75% of the excess above $350,000.
Over $1,000,000 $82,025, plus 8.95% of the excess above $1,000,000.

Corporate Franchise Tax

Net income of corporations in the District on a combined reporting basis.

DC Code Citation: Title 47, Chapter 18.

Tax Year 2016 Rate

The franchise tax rate is 9.2% of taxable income.

  • $250 minimum tax, if DC gross receipts are $1 million or less
  • $1,000 minimum tax, if DC gross receipts are more than $1 million

Unincorporated Business Franchise Tax

Net income of unincorporated businesses on a combined reporting basis 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.

Tax Year 2016 Rate

The franchise tax rate is 9.2% of taxable income.

  • $250 minimum tax, if DC gross receipts are $1 million or less
  • $1,000 minimum tax, if DC gross receipts are greater than $1 million

Tax Year 2015 Rate

New tax rates. The tax rates for individuals for tax years beginning after 12/31/2014 are:

If the taxable income is: The tax is:
Not over $10,000 4% of the taxable income
Over $10,000 but not over $40,000 $400, plus 6% of the excess over $10,000.
Over $40,000 but not over $60,000 $2,200, plus 7% of the excess over $40,000.
Over $60,000 but not over $350,000 $3,600, plus 8.5% of the excess over $60,000.
Over $350,000 $28,250, plus 8.95% of the excess above $350,000.

Corporate Franchise Tax

Net income of corporations in the District on a combined reporting basis.

DC Code Citation: Title 47, Chapter 18.

Tax Year 2015 Rate

The franchise tax rate is 9.4% of taxable income.

  • $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 on a combined reporting basis 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.

Tax Year 2015 Rate

The franchise tax rate is 9.4% of taxable income.

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