2026 Tax Overview
The District of Columbia has graduated individual-income-tax rates, a 6% general sales tax, and its own real-property-tax system. Calendar year and tax year are easy to confuse: a return filed during 2026 commonly reports tax year 2025, while tax-year 2026 returns are generally filed in 2027.
Income Tax
DC's current graduated individual-income-tax schedule ranges from 4% to 10.75%. Marginal rates apply to portions of DC taxable income within each bracket, not to all gross income. Residency, part-year status, federal adjustments, DC additions or subtractions, deductions, and credits affect the final calculation.
At the July 2026 review date, the final tax-year 2026 D-40 booklet was not yet available. This guide therefore does not label preliminary 2026 bracket thresholds or standard-deduction figures as final. Use the D-40 booklet for the tax year on the return.
Sales and Use Tax
The general DC sales and use tax rate is 6%. Separate rates apply to categories such as restaurant meals, lodging, parking, rental vehicles, and certain other transactions. A statement that “DC sales tax is 6%” describes the general rate, not every purchase.
Real Property Tax
DC assesses real property by classification and applies class-specific rates. Owner-occupants may qualify for the Homestead Deduction and other programs; seniors and eligible residents may receive additional relief. Assessment value, classification, credits, and eligibility determine the actual bill. Buyers should review the property's current assessment and whether an existing benefit will continue after transfer.
Estate and Other Taxes
DC imposes an estate tax when a decedent's estate exceeds the exemption applicable to the year of death. Because the exemption can be adjusted and the final 2026 materials should control, verify the current Form D-76 guidance before publishing or relying on an exact threshold. DC does not impose a separate inheritance tax on beneficiaries.
Excise or special rates apply to fuel, alcohol, tobacco, cannabis, lodging, parking, and other activities. These should not be combined into the general 6% sales-tax figure.
Retirement Considerations
Social Security benefits are not taxed by DC. Many pension and retirement-account distributions can be included in DC taxable income, while specific exclusions may apply. Federal and DC treatment can differ, so retirees should review the current D-40 instructions.
Relocation Context
DC should be compared with Maryland and Virginia using the actual home and work locations. Income-tax rates, local taxes, property taxes, commuting costs, and housing can differ across a short distance. Working in DC does not by itself answer where a household owes resident income tax.
Official Sources
Reviewed July 10, 2026. Confirm the booklet for the tax year being filed. This guide is general information and not individualized tax advice.