Washington D.C. uses a progressive income tax system with rates ranging from 4% to 10.75%. The District has one of the highest top marginal rates in the country, but it only applies to income over $1 million.
D.C. Tax Brackets
| Taxable Income | Tax Rate |
|---|---|
| $0 - $10,000 | 4% |
| $10,001 - $40,000 | 6% |
| $40,001 - $60,000 | 6.5% |
| $60,001 - $250,000 | 8.5% |
| $250,001 - $500,000 | 9.25% |
| $500,001 - $1,000,000 | 9.75% |
| Over $1,000,000 | 10.75% |
D.C.'s tax brackets are indexed for inflation annually. These figures are based on DC Office of Tax and Revenue guidelines.
What You'll See on Your Paystub
A D.C. worker's paystub includes both federal income tax withholding and District deductions:
| Deduction | Rate | Notes |
|---|---|---|
| Federal Income Tax | Varies | Based on W-4 and income |
| Social Security | 6.2% | Up to $181,200 wage base |
| Medicare | 1.45% | No wage limit |
| DC Income Tax | 4% - 10.75% | Progressive based on income |
| DC Paid Family Leave | 0% | Employer-paid (no employee deduction) |
D.C.'s Paid Family Leave program is fully funded by employers. Unlike some states, you won't see a deduction on your paystub for this benefit.
D.C. Standard Deduction
D.C. provides a standard deduction that reduces your taxable income:
| Filing Status | Standard Deduction (2026) |
|---|---|
| Single | $14,600 |
| Married Filing Jointly | $29,200 |
| Head of Household | $21,900 |
Reciprocity with Maryland and Virginia
D.C. has reciprocity agreements with both Maryland and Virginia. This is critical for the many workers who commute across jurisdictions:
- Live in DC, work in MD: Pay DC taxes only
- Live in DC, work in VA: Pay DC taxes only
- Live in MD, work in DC: Pay MD taxes only (file DC exemption form)
- Live in VA, work in DC: Pay VA taxes only (file DC exemption form)
You pay income tax to your state/district of residence, not where you work. This simplifies taxation for the DC metro area's highly mobile workforce.
Federal Government Workers
D.C. is home to the federal government and its workforce:
- Federal civilian employees pay DC taxes if they live in DC
- Members of Congress can claim their home state residence
- Congressional staffers follow normal residence rules
- Military members can claim their home state of record
Federal Employee Considerations
- FERS pension distributions are taxable
- TSP (Thrift Savings Plan) withdrawals are taxable
- Federal holiday schedules may affect pay periods
- Security clearance jobs are concentrated in the metro area
Nonprofit and Association Workers
D.C. has a high concentration of nonprofits, trade associations, and advocacy organizations:
- K Street lobbying firms and trade associations
- National headquarters of major nonprofits
- Think tanks and policy organizations
- International organizations (World Bank, IMF)
These employers follow standard DC withholding rules.
Retirement Income
D.C. taxes most retirement income:
- Social Security benefits are fully exempt
- 401(k) and IRA distributions are taxable
- Federal pension (FERS/CSRS) is taxable
- No special exclusion for retirement income
D.C. does not offer special tax breaks for retirement income beyond the Social Security exemption. Retirees may want to consider relocating to lower-tax jurisdictions.
D.C. vs. Neighboring Jurisdictions
| Jurisdiction | Tax Structure | Top Rate |
|---|---|---|
| Washington D.C. | Progressive | 10.75% |
| Maryland | Progressive + Local | 5.75% + local |
| Virginia | Progressive | 5.75% |
Comparing Take-Home Pay
Here's how a $100,000 annual salary compares in the DC metro area:
| Jurisdiction | Effective Rate | Annual State/Local Tax |
|---|---|---|
| Washington D.C. | ~7.2% | ~$7,200 |
| Virginia | ~5.3% | ~$5,300 |
| Maryland (Montgomery Co.) | ~7.5% | ~$7,500 |
Virginia generally offers the lowest income taxes in the DC metro area. However, housing costs, commute times, and lifestyle preferences also factor into where people choose to live.
High-Income Considerations
D.C.'s graduated rate structure means higher earners pay significantly more:
| Annual Income | Effective DC Rate | Annual DC Tax |
|---|---|---|
| $75,000 | ~6.2% | ~$4,650 |
| $150,000 | ~7.6% | ~$11,400 |
| $300,000 | ~8.2% | ~$24,600 |
| $500,000 | ~8.6% | ~$43,000 |
Key Takeaways
- D.C. has high marginal rates but they primarily affect upper-income earners
- Reciprocity with MD and VA means you only pay taxes where you live
- Paid Family Leave is employer-funded (no employee deduction)
- Social Security is exempt but other retirement income is taxable
- Federal employees follow residence-based taxation like everyone else