District of Columbia resident income tax on Form D-40 for 2026 and 2025: residency (domicile or 183-day abode), rates, the DC standard deduction and unsettled 2026 OBBBA conformity, DC EITC by year, Keep Child Care Affordable and Schedule H credits, D-30 pointer, D-40B refunds, estimated tax and the prior-year safe harbor, extension and penalties.
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| Taxable income | Tax |
|---|---|
| Not over $10,000 | 4% of taxable income |
| Over $10,000, not over $40,000 | $400 plus 6% of the excess over $10,000 |
| Over $40,000, not over $60,000 | $2,200 plus 6.5% of the excess over $40,000 |
| Over $60,000, not over $250,000 | $3,500 plus 8.5% of the excess over $60,000 |
| Over $250,000, not over $500,000 | $19,650 plus 9.25% of the excess over $250,000 |
| Over $500,000, not over $1,000,000 | $42,775 plus 9.75% of the excess over $500,000 |
| Over $1,000,000 | $91,525 plus 10.75% of the excess over $1,000,000 |
This Guide covers the District of Columbia (DC) individual income tax return, Form D-40, for tax year 2026 (returns filed in 2027), with a dated section for 2025 returns. It is for DC residents and part-year residents, including sole proprietors and single-member LLC owners whose business profit reaches DC through federal adjusted gross income (AGI).
Read this first: the 2026 law is not settled. In December 2025, emergency and temporary acts changed DC's rules for 2025. They decoupled DC from several federal changes made by P.L. 119-21 ("OBBBA"). The temporary act expires on 25 September 2026. In July 2026 the Council passed the Fiscal Year 2027 Budget Support Act (BSA) on its second vote, and also as an emergency act (Council, 10 July 2026). When this Guide was written, no official DC page showed that act's enacted tax text. It may differ from the April 2026 draft described below. So:
It does not cover the unincorporated business franchise tax return (Form D-30) beyond a pointer, the corporate franchise tax (D-20), fiduciary returns (D-41), withholding, real property tax, or estate tax. See "When to refuse or refer".
Who is a resident (D.C. Code § 47-1801.04, paragraph 42):
Nonresidents are not taxed on their income. The Home Rule Act bars the Council from imposing "any tax on the whole or any portion of the personal income ... of any individual not a resident of the District" (D.C. Code § 1-206.02). A commuter who lives in Maryland or Virginia and works in DC does not file a D-40. Some commuters have DC tax withheld from their pay, or pay DC estimated tax, in error. They claim it back on Form D-40B, Nonresident Request for Refund (see "Filing and payment").
Which tax year? 2025 has firm rules. For 2026, the rates are firm but the deduction and credit amounts must be checked.
Residency for the whole year.
Are they in an excluded group? For example:
Federal return: filing status, federal AGI, and whether they took the standard deduction or itemized. DC follows that choice.
Dates of birth and blindness of the taxpayer and spouse (for the additional standard deduction).
Business activity:
The answers decide whether a D-30 is needed.
Federal items DC does not follow:
Credits:
Payments: DC withholding, estimated payments with dates, and the prior-year DC tax and residency (for the 110% rule; 2025 D-2210).
D-40 line numbers are from the 2025 return (2025 D-40 booklet).
Decide residency using the tests in "Scope". Nonresidents stop here. They file no D-40 and use D-40B to recover DC tax withheld.
Decide whether a return is needed.
Line 4, federal AGI. Start from federal AGI, not federal taxable income.
Line 5, franchise tax. Add back any franchise tax deducted on a federal business return (Forms 1065 or 1120-S).
Line 6, other additions (Schedule I, Calculation A).
Lines 8 to 15, subtractions.
Line 16, DC AGI = Line 7 minus Line 15.
Lines 17 and 18, deduction. Take the same type as on the federal return (D.C. Code § 47-1803.04, subsection (b)).
Line 19, taxable income = Line 16 minus Line 18.
Tax. Use the tax tables in the 2025 D-40 booklet if taxable income is $100,000 or less. Otherwise use the rate schedule in "Figures by year".
Credits and payments. Take non-refundable credits first. Then add:
Then add any D-2210 underpayment interest.
Part-year residents. Report only income for the period of DC domicile, and prorate the standard deduction and credits.
Sole proprietors and the D-30. DC taxes an unincorporated business on a separate return, the D-30.
The same schedule applies to all filing statuses for taxable years beginning after 31 December 2021. It did not change for 2025 or 2026. The 2026 D-40ES prints the same table (2026 D-40ES).
| Taxable income | Tax |
|---|---|
| Not over $10,000 | 4% of taxable income |
| Over $10,000, not over $40,000 | $400 plus 6% of the excess over $10,000 |
| Over $40,000, not over $60,000 | $2,200 plus 6.5% of the excess over $40,000 |
| Over $60,000, not over $250,000 | $3,500 plus 8.5% of the excess over $60,000 |
| Over $250,000, not over $500,000 | $19,650 plus 9.25% of the excess over $250,000 |
| Over $500,000, not over $1,000,000 | $42,775 plus 9.75% of the excess over $500,000 |
| Over $1,000,000 | $91,525 plus 10.75% of the excess over $1,000,000 |
Spouses or domestic partners who live together and file separately are each treated as single for the rate schedule.
| Filing status | 2025 basic standard deduction | 2025 D-40 filing threshold (gross income at least) |
|---|---|---|
| Single, married filing separately, dependent filer | $15,000 | $15,000 |
| Head of household | $22,500 | $22,500 |
| Married or registered domestic partners filing jointly or separately on the same return; qualifying widow(er) | $30,000 | $30,000 |
| Tax year | DC EITC for a filer with a qualifying child | Status |
|---|---|---|
| 2022 to 2024 | 70% of the federal EITC | Law (subparagraph (B-1)) |
| 2025 | 100% of the federal EITC | Temporary act raised (B-2) from 85% to 100% |
| 2026 to 2028 | 85% of the federal EITC | Expected: the rate under 2024 law, and the rate in the proposed FY 2027 BSA; confirm |
| 2029 onward | 100% of the federal EITC | 2024 law; confirm |
2025 limits:
For 2026 amounts, check the 2026 Schedule H.
Who can claim:
How it works.
Filing: attach Schedule H to the D-40. Someone who is not required to file a D-40 can file Schedule H as a standalone return.
How DC links to federal law. DC uses the Internal Revenue Code, whose provisions "apply on the same dates that they are effective for federal tax purposes" (§ 47-1801.04, paragraph 28). So federal changes apply unless DC decouples.
2025: what DC decoupled from. Two acts apply "as of January 1, 2025": the emergency act (D.C. Act 26-214, 3 December 2025) and the temporary act (D.C. Law 26-89, effective 12 February 2026). The 2025 booklet lists the federal changes DC does not recognise:
DC also continues to add back section 168 bonus depreciation (Schedule I, Calculation A, Line 3).
Congress's disapproval does not change 2025. H.J. Res. 142 (P.L. 119-78) was signed on 18 February 2026.
2026 is open.
The Council's July 2026 act. The Council passed the FY 2027 BSA on its second vote in July 2026, and also as an emergency act: "The Budget Support Act was passed in the second of two necessary votes, and was passed on an emergency basis as well." (Council, 10 July 2026). The Council says the bill was amended before passage. Its enacted tax text was not found on an official page.
The April 2026 draft of the FY 2027 BSA. In April 2026 the CFO described the draft's tax subtitle. The draft would:
These are the April draft's terms, not confirmed enacted law. Treat all of this as unconfirmed, and check OTR's 2026 forms before filing.
Child tax credit.
| Situation | Rule |
|---|---|
| Domiciled in Virginia, keeps a DC apartment for exactly 183 days | Resident: the test is 183 days or more. Files a D-40 on all income. |
| Domiciled in Maryland, DC apartment for 182 days, works in DC | Nonresident. No D-40. Claim back any DC withholding on D-40B. |
| Moved into DC with intent to stay on 1 July | Part-year resident from the date domicile changed. Report DC-period income; prorate deduction and credits. |
| Single resident, 2025 gross income exactly $15,000 | Must file: the threshold is "at least" $15,000. |
| Itemized on the federal return, DC standard deduction would be larger | Must itemize on the DC return. |
| DC AGI exactly $200,000 (joint) | No 5% itemized reduction: it applies only when DC AGI is greater than $200,000. |
| Consultant whose income is almost all personal services, no material capital | Likely outside the D-30 under the more-than-80% rule. Confirm with the D-30 instructions. |
| Client moved into DC in March of the prior year | The 110% prior-year route is not available (they must have been a DC resident during all of the prior year). Use 90% of the current year's tax. |
| DC tax after withholding and credits is below $100 | No estimated tax interest. |
| Taxpayer with no qualifying child, 2025 | DC's own childless EITC applies (2025 maximum $649), not the percentage match. |
Amounts described as client facts are hypothetical inputs.
Case 1: 2025, single, full-year resident.
Client facts: federal AGI of $80,000, no DC additions or subtractions, federal standard deduction, under 65, not blind.
Case 2: 2025, married filing jointly, full-year residents.
Client facts: federal AGI of $150,000, federal standard deduction, both under 65.
Case 3: 2026 estimated tax, the 110% rule.
Client facts: the Case 2 couple were DC residents for all of 2025, with a 2025 DC tax of $8,600. They expect 2026 DC tax of $9,000 and have no DC withholding.
Case 4: DC EITC, 2025 and 2026.
Client facts: a full-year resident with one qualifying child, allowed a federal EITC of $4,000.
Case 5: commuter refund (D-40B).
Client facts: domiciled in Maryland all of 2025 and never had a DC place of abode. The client's only DC income was wages, and the employer withheld $2,000 of DC tax in error.
Case 6: Schedule H renter credit, 2025.
Client facts: a single renter aged 40, not anyone's dependent, who rented the same DC apartment all of 2024 and 2025. Federal AGI is $20,000. Rent paid in 2025 is $12,000.
Residency in doubt, for example:
The D-30 (2025 D-40 booklet). Refer any sole proprietor, partnership or LLC with DC-source gross income of more than $12,000 where the more-than-80% personal services exclusion is unclear. The D-30 has its own return, rate and estimated payments; refer to the D-30 instructions or a specialist.
2026 items that depend on the unsettled law:
Check OTR's 2026 forms before filing. Warn clients that 2026 estimates based on the D-40ES may differ from the final rules.
Business depreciation history: bonus or special depreciation add-backs across several years, or the sale of an asset with a different DC basis.
Part-year residents where the booklet's day-based proration and the statute's month-based proration give materially different answers.
Other credits: credit for tax paid to another state, the DC Low-Income Housing Tax Credit, and other Schedule U credits.
Military members and spouses (combat zone extensions, Military Spouse Residency Relief Act).
Health care shared responsibility (Schedule HSR) where coverage was not full-year.
Outside this Guide: fiduciary returns (D-41), corporate franchise tax (D-20), the ballpark fee (a business-level fee), estate tax and real property tax.
Due date: 15 April (15 April 2026 for 2025 returns; 15 April 2027 for 2026 returns). If it falls on a weekend or legal holiday, file by the next business day.
Extension: DC does not follow the federal extension automatically. File Form FR-127 by 15 April for a six-month extension (to 15 October 2026 for 2025 returns).
Late filing and late payment penalties (D.C. Code § 47-4213). Neither applies if there is reasonable cause and no willful neglect.
Interest on unpaid tax runs from the original due date, disregarding any extension to file. The rate is 10% a year, compounded daily (D.C. Code § 47-4201).
Estimated tax (D-40ES). Required if the client must file a DC return and expects to owe $100 or more in tax.
Underpayment interest (Form D-2210) is charged at 10% a year, compounded daily. It is not due if either:
An annualized income method is available when income was uneven.
Electronic payment is required if a payment for a period exceeds $5,000 (MyTax.DC.gov or Modernized e-File).
Nonresident refunds (D-40B). Available to a nonresident whose only DC-source income was wages, and who either commuted daily from their home state or was domiciled in another state. They must not have kept a DC place of abode for 183 days or more.
Federal return copy. From tax year 2025, OTR Tax Notice 2025-01 requires certain high-income filers to submit an electronic copy of their federal return. Check the booklet for the thresholds.
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