You are required to file a D.C. individual tax return (Form D40) if: (1) You were a resident of the District of Columbia and you were required to file a federal tax return; (2) Your permanent residence was in the District of Columbia for either part of or the full taxable year; (3) You lived in the District of Columbia for 183 days or more during the taxable year, even if your permanent residence was outside the District of Columbia.
Unlike most States, D.C. does not have a nonresident individual income tax return. If you are seeking a refund of taxes withheld, you would file Form D40-B, Nonresident Request for Refund. Metro D.C. wage earners owe taxes to the jurisdiction where living and not where working.
The individual tax rates for District of Columbia 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||$85,025, plus 8.95% of the excess above $1,000,000.|
District tax rates are much higher than neighboring Virginia and are comparable with Maryland, which has a county tax. Tax Return due date is April 15th and if you expect to owe but are not yet ready to file, you need to submit an estimated payment with Form FR-127, Extension of Time to File. Taxpayers are encouraged to create an account with the Office of Tax & Revenue (OTR) to track filings and make payments click here
D.C. OTR charges significant penalties and interest for non-compliance, including:
- A penalty of 5% per month if you fail to file a return or pay any tax due on time, not to exceed an additional amount equal to 25% of the tax due;
- A 20% penalty on the portion of an underpayment of taxes if attributable to negligence.
- Interest of 10% per year, compounded daily, on a late payment;
- A one-time fee of 10% to cover internal collection efforts on any unpaid balance after 90 days.
Though the federal mandate has been eliminated, the District has enacted legislation that requires District residents to have minimum essential health coverage. Taxpayers without coverage pay a penalty equal to 2.5% of their taxable income. Taxpayers can seek an exemption by filing Form HSR, DC Healthcare Shared Responsibility Schedule.