District of Columbia tax deductions and write-offs (2026)

Yes. D.C. fully taxes military retired pay received by the retiree; the old $3,000 exclusion for retirees age 62 and older ended after tax year 2014. Survivor Benefit Plan, RCSBP and RSFPP annuities are excluded from D.C. income for survivors age 62 or older. Other retirement income: Pensions and 401(k)/IRA withdrawals are taxed as ordinary income; DC has no general retirement income exclusion.

Yes. Pensions and 401(k)/IRA withdrawals are taxed as ordinary income; DC has no general retirement income exclusion.

No. D.C. subtracts the full federally taxable amount of Social Security and Tier 1 Railroad Retirement benefits on Form D-40. The 2026 booklet was not yet available, but the exclusion is in standing law (D.C. Code 47-1803.02).

Yes: District of Columbia offers the DC Earned Income Tax Credit (DC EITC), 85% of the federal EITC for filers with qualifying children for 2026–2028 (it was 100% for 2025 only; 100% again from 2029) (refundable). ITIN filers eligible. Certain noncustodial parents who pay court-ordered child support also qualify. Workers without children use a separate DC formula with a wider income range. Refunds of $1,200+ can be paid in 12 monthly installments. Congress repealed a December 2025 law that would have kept 100% for 2026.

Only instead of income tax: itemizers in District of Columbia pick sales tax (6% state rate, about 6% with local taxes) or state income tax, whichever is bigger. The 6% general rate stays in effect through Sept. 30, 2027; a scheduled increase to 7% has been postponed to Oct. 1, 2027.

Yes on your District of Columbia return: $4,000 single / $8,000 joint (each spouse must own an account) per account owner. Only contributions to the state's own plan count. Only account-owner contributions count; deductions recaptured if funds are withdrawn within 2 years of opening and not used for education.

Yes: District of Columbia offers the Schedule H Homeowner and Renter Property Tax Credit. Refundable credit of up to $1,425 (2025) for lower-income renters and homeowners, where 20% of rent paid counts as property tax; claimed on Schedule H with Form D-40 or filed on its own. Federal AGI of the tax filing unit $66,000 or less if under 70, or $90,000 or less if 70 or older (2025).

No state child tax credit, but District of Columbia has a child care credit: 32% of the federal child and dependent care credit (nonrefundable). Separately, the refundable Keep Child Care Affordable Tax Credit covers licensed child care costs up to $1,200 per child under 4 (2025) if DC taxable income is $180,100 or less ($90,000 married filing separately). UNCERTAIN: DC enacted a refundable $1,000-per-child credit (children under 18) for tax year 2026 through temporary legislation. Congress passed a disapproval resolution (P.L. 119-78, February 2026), which DC argues missed the review deadline. ITEP (September 2026) reports DC did not move forward with launching the credit, and the temporary law was set to expire September 25, 2026. The permanent code still describes an older $420 credit for children under 6, which was never funded. Check with DC's Office of Tax and Revenue before relying on any DC child tax credit for 2026. District of Columbia does have an earned income credit: 85% of the federal EITC for filers with qualifying children for 2026–2028 (it was 100% for 2025 only; 100% again from 2029).

Yes, as a business expense: District of Columbia charges $99 to form an LLC; ongoing: $300 biennial report. Unincorporated Business Franchise Tax 8.25% if DC gross receipts exceed $12,000; minimum $250 ($1,000 if gross receipts exceed $1M). Biennial report due April 1 of the year after formation, then every 2 years; $100 late penalty.

For 2026 DC rates are 4% (up to $10,000), 6% (to $40,000), 6.5% (to $60,000), 8.5% (to $250,000), 9.25% (to $500,000), 9.75% (to $1M) and 10.75% above $1M, unchanged since 2022.