District of Columbia

The District of Columbia enacted the Uniform Community Property Disposition at Death Act (effective March 7, 2025)

“Uniform Community Property Disposition at Death Act of 2024”

Note: D.C. Law 25-270, effective March 7, 2025, codified at D.C. Code 19-2301 to 19-2314. Preserves the community-property character of assets a married couple brings from a community property jurisdiction. DC's first marital fact; DC is otherwise a common-law property jurisdiction.

DC income tax: up to 10.75% on income above $1,000,000 (same schedule for all filing statuses)

“(11) In the case of taxable years beginning after December 31, 2021, there is imposed on the taxable income of every resident a tax determined in accordance with the following table: Not over $10,000 4% of the taxable income ... Over $1,000,000 $91,525, plus 10.75% of the excess over $1,000,000”

Note: DC Code §47-1806.03(a)(11) imposes tax at seven brackets from 4% (not over $10,000) to 10.75% (over $1,000,000). DC Code §47-1806.03 provides one schedule for all statuses, creating the maximum marriage penalty on a joint return vs. two singles. The $1,000,000 threshold is per return (same for single and MFJ). The D-40 Calculation J (married filing separately on same return) splits income and largely neutralizes the bracket penalty. The $30,000 MFJ standard deduction (TY2025) is a separately verified figure; this citation covers the rate schedule only, not the deduction amount.

DC standard deduction MFJ

“In the case of a return filed by married individuals filing a joint return, separate on a combined return, or a surviving spouse, $30,000; and [for] [t]axable years beginning after December 31, 2025: In the case of a return filed by married individuals filing a joint return, separate on a combined return, or a surviving spouse, $30,000 increased annually pursuant to the cost-of-living adjustment”

Note: D.C. Act 26-214 (effective 2025; emergency amendment) establishes the standard deduction via new §47-1801.04(3A) (definitions section) at $30,000 for MFJ TY2025, adjusted annually for cost-of-living after 2025. The prior statutory reference to §47-1806.02 was repealed and replaced by this amendment to the definitions section.

IRC §1212(b): capital losses carry forward only for non-corporate taxpayers; no carryback

“In the case of a taxpayer other than a corporation, if there is a net capital loss for any taxable year: (1) the excess of the net short-term capital loss over the net long-term capital gain for such year shall be a short-term capital loss in the succeeding taxable year, and (2) the excess of the net long-term capital loss over the net short-term capital gain for such year shall be a long-term capital loss in the succeeding taxable year.”

Note: IRC §1212(b) limits non-corporate taxpayers to carrying losses forward only ('succeeding taxable year'). IRC §1212(a), which allows a 3-year carryback, applies only to corporations. For conformity states, the federal carryforward amount flows to the state return unchanged.

DC exempts DC-issued bonds; out-of-state muni interest is taxable effective TY2025

“For tax years beginning after December 31, 2024: Shall not include interest on the obligations of the District of Columbia or bonds issued by DC Water, the Washington Metropolitan Area Transit Authority, and the District of Columbia Housing Finance Agency.”

Note: Law change effective TY2025. Pre-2025: DC exempted all muni interest (both DC and out-of-state) under §47-1803.02(a)(1)(B)(i). Effective for tax years beginning after December 31, 2024, only DC, DC Water, WMATA, and DC Housing Finance Agency bonds remain exempt; all other state and local muni interest is now included in DC gross income and taxable. DC now follows the standard instate-exempt/outstate-taxable rule. §47-1803.02(a)(1)(B)(ii)(II) provides: "Shall include interest upon the obligations of a state or any political subdivision thereof, but not including obligations of the District of Columbia or bonds issued by DC Water, the Washington Metropolitan Area Transit Authority, and the District of Columbia Housing Finance Agency."

DC exempts DC-issued bonds; out-of-state muni interest is taxable effective TY2025

“For tax years beginning after December 31, 2024: Shall not include interest on the obligations of the District of Columbia or bonds issued by DC Water, the Washington Metropolitan Area Transit Authority, and the District of Columbia Housing Finance Agency.”

Note: Law change effective TY2025. Pre-2025: DC exempted all muni interest (both DC and out-of-state) under §47-1803.02(a)(1)(B)(i). Effective for tax years beginning after December 31, 2024, only DC, DC Water, WMATA, and DC Housing Finance Agency bonds remain exempt; all other state and local muni interest is now included in DC gross income and taxable. DC now follows the standard instate-exempt/outstate-taxable rule. §47-1803.02(a)(1)(B)(ii)(II) provides: "Shall include interest upon the obligations of a state or any political subdivision thereof, but not including obligations of the District of Columbia or bonds issued by DC Water, the Washington Metropolitan Area Transit Authority, and the District of Columbia Housing Finance Agency."

District of Columbia partially conforms to IRC §1400Z-2 QOZ gain deferral and exclusion

“(20) Qualified Opportunity Fund Capital Gains. ; (A) Deferral of a capital gains tax payment for investing in a qualified opportunity fund ("QOF") shall be realized only if the taxpayer invests in a QOF that meets the criteria set forth in subparagraph (D) of this paragraph.”

Note: Quote is DC Code §47-1803.03(a)(20). Companion §47-1803.02(b-5): 'The capital gains deduction for investing in a qualified opportunity fund shall apply to an individual, estate, or trust in the same manner as set forth in § 47-1803.03(a)(20).' DC QOZ conformity requires the QOF to meet DC-specific criteria (subparagraph (D), Mayoral-certified DC zones); federal QOF investments in non-DC or non-certified zones do not receive DC treatment.

DC non-conforms to IRC §1202 QSBS exclusion: DC Law 26-89 adds back federally excluded QSBS gain effective TY2025

“(1C) For taxable years beginning after December 31, 2024, individuals, estates and trusts shall include any income or gain excluded from their federal gross income pursuant to § 1202(a) of the Internal Revenue Code of 1986 for that taxable year.”

Note: DC Law 26-89 added §47-1803.02(a)(1C) making §1202-excluded gain an addition to DC gross income for taxable years beginning after December 31, 2024 (i.e. TY2025 onward, per the codified text).

District of Columbia taxes FNMA and FHLMC bond interest: DC gross income includes all items in federal gross income; FNMA/FHLMC interest is in federal gross income and no DC subtraction exists for non-federally-preempted GSE interest

“Items of income excluded from gross income by provisions of the Internal Revenue Code shall also be excluded from gross income for District tax purposes.”

Note: DC gross income includes federal gross income items; FNMA/FHLMC interest is in federal gross income (not IRC-excluded). The DC subtraction for federally-excluded items does not help because FNMA/FHLMC interest is NOT federally excluded. 31 U.S.C. §3124 preempts DC taxation only of direct US government obligations; FNMA (12 U.S.C. §§1719(e), 1723a(c)) and FHLMC (12 U.S.C. §1455(a)) have no bondholder exemption statute. Confidence: medium.

DC income tax: up to 10.75% on income above $1,000,000 (same schedule for all filing statuses)

“(11) In the case of taxable years beginning after December 31, 2021, there is imposed on the taxable income of every resident a tax determined in accordance with the following table: Not over $10,000 4% of the taxable income ... Over $1,000,000 $91,525, plus 10.75% of the excess over $1,000,000”

Note: DC Code §47-1806.03(a)(11) imposes tax at seven brackets from 4% (not over $10,000) to 10.75% (over $1,000,000). DC Code §47-1806.03 provides one schedule for all statuses, creating the maximum marriage penalty on a joint return vs. two singles. The $1,000,000 threshold is per return (same for single and MFJ). The D-40 Calculation J (married filing separately on same return) splits income and largely neutralizes the bracket penalty. The $30,000 MFJ standard deduction (TY2025) is a separately verified figure; this citation covers the rate schedule only, not the deduction amount.

U.S. Treasury interest exempt from District of Columbia income tax: 31 U.S.C. §3124(a) prohibits state taxation of U.S. government obligations

“Stocks and obligations of the United States Government are exempt from taxation by a State or political subdivision of a State. The exemption applies to each form of taxation that would require the obligation, the interest on the obligation, or both, to be considered in computing a tax.”

Note: 31 U.S.C. §3124(a) preempts state income taxation of U.S. government obligations. Covers T-bills, T-notes, T-bonds, TIPS, and I-bonds. Most states allow a deduction or subtraction by statute cross-referencing this federal preemption.

FHLB and FFCB bond interest exempt from the District of Columbia income tax: federal enabling statutes mandate state tax exemption

“Any security issued under this chapter by a Federal home loan bank, including the stock thereof, shall be exempt from taxation, except taxes upon real estate, by any State, county, municipality, or local taxing authority.”

Note: 12 U.S.C. §1433 (FHLB) and 12 U.S.C. §2023 (FFCB/Farm Credit Act) both mandate state tax exemption for securities issued under their chapters. Contrasts with FNMA (12 U.S.C. §§1719(e), 1723a(c)) and FHLMC (12 U.S.C. §1455(a)) which have no bondholder exemption statute and whose interest is taxable by income-tax states.

Farm Credit Act: notes, bonds, debentures, and other obligations of Farm Credit Banks are instrumentalities of the United States exempt from all State, municipal, and local taxation

“The mortgages held by the Farm Credit Banks and the notes, bonds, debentures, and other obligations issued by the banks shall be considered and held to be instrumentalities of the United States and, as such, they and the income therefrom shall be exempt from all Federal, State, municipal, and local taxation, other than Federal income tax liability of the holder thereof under the Public Debt Act of 1941 (31 U.S.C. 3124).”

Note: 12 U.S.C. §2023 explicitly covers 'the income therefrom' (i.e., interest payments to bondholders), exempting it from all State and local taxation. The only carve-out is federal income tax on the holder. Parallel to 12 U.S.C. §1433 (FHLB Act), which exempts FHLB securities from state taxation. Together §1433 and §2023 mandate state and local tax exemption for both FHLB and FFCB bond interest. Shared across all jurisdictions: a single object reference satisfies buildCitationIndex() identity check.

IRC §1212(b): capital losses carry forward only for non-corporate taxpayers; no carryback

“In the case of a taxpayer other than a corporation, if there is a net capital loss for any taxable year: (1) the excess of the net short-term capital loss over the net long-term capital gain for such year shall be a short-term capital loss in the succeeding taxable year, and (2) the excess of the net long-term capital loss over the net short-term capital gain for such year shall be a long-term capital loss in the succeeding taxable year.”

Note: IRC §1212(b) limits non-corporate taxpayers to carrying losses forward only ('succeeding taxable year'). IRC §1212(a), which allows a 3-year carryback, applies only to corporations. For conformity states, the federal carryforward amount flows to the state return unchanged.

DC income tax: up to 10.75% on income above $1,000,000 (same schedule for all filing statuses)

“(11) In the case of taxable years beginning after December 31, 2021, there is imposed on the taxable income of every resident a tax determined in accordance with the following table: Not over $10,000 4% of the taxable income ... Over $1,000,000 $91,525, plus 10.75% of the excess over $1,000,000”

Note: DC Code §47-1806.03(a)(11) imposes tax at seven brackets from 4% (not over $10,000) to 10.75% (over $1,000,000). DC Code §47-1806.03 provides one schedule for all statuses, creating the maximum marriage penalty on a joint return vs. two singles. The $1,000,000 threshold is per return (same for single and MFJ). The D-40 Calculation J (married filing separately on same return) splits income and largely neutralizes the bracket penalty. The $30,000 MFJ standard deduction (TY2025) is a separately verified figure; this citation covers the rate schedule only, not the deduction amount.

District of Columbia estate tax: graduated 11.2% to 16%; $4,873,200 exclusion for TY2025

“For estates of decedents who die on or after January 1, 2025, and on or before December 31, 2025, the exclusion (zero bracket) amount is increased to $4,873,200.00.”

Note: DC estate tax uses the federal state death tax credit bracket table. Top rate is 16% on DC taxable estate over approximately $10M. Exclusion is inflation-adjusted annually. Rate schedule in Form D-76 instructions.

District of Columbia estate tax: graduated 11.2% to 16%; $4,873,200 exclusion for TY2025

“For estates of decedents who die on or after January 1, 2025, and on or before December 31, 2025, the exclusion (zero bracket) amount is increased to $4,873,200.00.”

Note: DC estate tax uses the federal state death tax credit bracket table. Top rate is 16% on DC taxable estate over approximately $10M. Exclusion is inflation-adjusted annually. Rate schedule in Form D-76 instructions.

District of Columbia estate tax zero bracket $4,988,400 for deaths in 2026

“For estates of decedents who die on or after Jan. 1, 2026, and on or before Dec. 31, 2026, the exclusion (zero bracket) amount is increased to $4,988,400.”

Note: Matches the TY2026 window already encoded in the estate rate schedule (dcSchedule(4_988_400)).

DC income tax: up to 10.75% on income above $1,000,000 (same schedule for all filing statuses)

“(11) In the case of taxable years beginning after December 31, 2021, there is imposed on the taxable income of every resident a tax determined in accordance with the following table: Not over $10,000 4% of the taxable income ... Over $1,000,000 $91,525, plus 10.75% of the excess over $1,000,000”

Note: DC Code §47-1806.03(a)(11) imposes tax at seven brackets from 4% (not over $10,000) to 10.75% (over $1,000,000). DC Code §47-1806.03 provides one schedule for all statuses, creating the maximum marriage penalty on a joint return vs. two singles. The $1,000,000 threshold is per return (same for single and MFJ). The D-40 Calculation J (married filing separately on same return) splits income and largely neutralizes the bracket penalty. The $30,000 MFJ standard deduction (TY2025) is a separately verified figure; this citation covers the rate schedule only, not the deduction amount.

the District of Columbia conforms to the federal capital-loss base; treatment of an imported pre-residency section 1212 carryforward is a structural inference

“In the case of a taxable year beginning after December 31, 1986, there is imposed on the taxable income of every resident a tax determined in accordance with the following table:”

Note: DC Code §47-1806.03 imposes the tax on the taxable income of every resident; DC taxable income derives from federal adjusted gross income (§47-1803.02), so the federal section 1212 capital-loss carryover flows through. Quote verbatim from the live DC Council code page. No published guidance addresses the imported pre-residency carryforward, so that application remains a structural inference.