State retirement taxes · 2026
Does DC tax retirement income?
Short answer: Yes — everything except Social Security. DC does not tax Social Security benefits. No retirement income exclusion.
What’s taxed in DC
2026 rules.
- Social SecurityNot taxed
- DC does not tax Social Security benefits.
- PensionsTaxed
- Pensions are fully taxable, public or private.
- IRA & 401(k) withdrawalsTaxed
- IRA and 401(k) withdrawals are fully taxable.
- Military retirement payTaxed
- Military retirement pay is taxable; DC’s former $3,000 exclusion ended after 2014.
- Income tax rate10.75% top
- Seven brackets, the same for every filing status: 4% on the first $10,000, rising to 8.5% from $60,000, 9.25% from $250,000, 9.75% from $500,000 and 10.75% over $1 million.
Does DC tax Social Security?
DC does not tax Social Security benefits.
Taxable Social Security and Tier 1 Railroad Retirement benefits are subtracted on Form D-40, with no age or income test.
Your federal return is a separate question — see how much of your benefit the IRS taxes with the taxable Social Security calculator.
Are pensions taxed in DC?
Pensions are fully taxable, public or private.
DC’s old $3,000 exclusion for DC and federal government pensions (and military pay) at 62+ ended after 2014. The only remaining break is an exclusion for DC or federal government survivor benefits received by survivors 62 or older.
Public vs. private pensions: Treated the same: taxable.
Are IRA and 401(k) withdrawals taxed in DC?
IRA and 401(k) withdrawals are fully taxable.
They are taxed as included in federal AGI; DC has no retirement exclusion.
Required minimum distributions (RMDs) are IRA and 401(k) withdrawals, so the same rules apply. Estimate your RMD.
Is military retirement pay taxed in DC?
Military retirement pay is taxable; DC’s former $3,000 exclusion ended after 2014.
What is DC’s income tax rate?
7 brackets, topping out at 10.75%.
Seven brackets, the same for every filing status: 4% on the first $10,000, rising to 8.5% from $60,000, 9.25% from $250,000, 9.75% from $500,000 and 10.75% over $1 million.
2026 brackets. Each rate applies to taxable income above the amount shown.
| All filers | Rate |
|---|---|
| $0 | 4% |
| $10,000 | 6% |
| $40,000 | 6.5% |
| $60,000 | 8.5% |
| $250,000 | 9.25% |
| $500,000 | 9.75% |
| $1,000,000 | 10.75% |
Standard deduction and exemptions
For 2025 DC set its own standard deduction: $15,000 single or married filing separately, $22,500 head of household, $30,000 joint, plus $1,600 for 65+ or blind ($2,000 if single or head of household). For 2026, DC’s estimated-tax worksheet uses $16,100 / $24,150 / $32,200, with $1,650 extra ($2,050 if unmarried) — treat these as provisional until the 2026 D-40 booklet.
What tax breaks do seniors get in DC?
The extra standard deduction at 65+. DC does not allow the federal $6,000 senior deduction. The Schedule H property tax credit pays up to $1,425, with an income limit of $90,000 for claimants 70 and older ($66,000 under 70). Survivors 62+ can exclude DC or federal government survivor benefits.
What changed for 2026?
Emergency Act 26-214 (November 2025) and Temporary Law 26-89 (effective February 12, 2026) decoupled DC from the federal standard deduction, the tips, overtime and car-loan deductions and the senior deduction, and made out-of-state municipal bond interest taxable from 2025. The temporary law runs 225 days; whether it was made permanent is not confirmed.
Rules from the 2025 D-40 booklet (rev. 08/2026); the 2026 standard deduction comes from the 2026 D-40ES worksheet and is provisional.
What we couldn’t confirm
- DC’s 2026 standard deduction depends on whether temporary decoupling legislation was made permanent, so we label the 2026 figures provisional.
How DC compares with its neighbors
Thinking of moving across the line? Here’s how each bordering state treats retirement income in 2026.
- District of ColumbiaThis pageLess friendlySocial Security Not taxedTop rate: 10.75% top
- MarylandFriendlySocial Security Not taxedTop rate: 6.5% top
- VirginiaFriendlySocial Security Not taxedTop rate: 5.75% top
State tax is half the picture — check the federal side
DC retirement tax questions
Is DC tax-friendly for retirees?
We rate DC “Less friendly” for 2026. DC does not tax Social Security benefits. No retirement income exclusion. The top income tax rate is 10.75%.
Are required minimum distributions (RMDs) taxed in DC?
RMDs are withdrawals from IRAs and 401(k)-type plans, so they follow DC’s rules for those accounts. IRA and 401(k) withdrawals are fully taxable.
Is military retirement pay taxed in DC?
Yes. Military retirement pay is taxable; DC’s former $3,000 exclusion ended after 2014.
What is DC’s income tax rate for 2026?
Seven brackets, the same for every filing status: 4% on the first $10,000, rising to 8.5% from $60,000, 9.25% from $250,000, 9.75% from $500,000 and 10.75% over $1 million.
Sources for DC
Primary sources only. We re-check them whenever an agency publishes new figures.
- State
- State
- State
- State
- State
- State
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