The District of Columbia does not tax Social Security, but DC income tax does reach pensions, military retired pay, annuities and retirement-account withdrawals. The DC retirement income tax runs from 4% to 10.75% for tax years 2025 and 2026, and the $3,000 DC pension exclusion that older federal and District retirees once claimed stopped applying with tax years beginning January 1, 2015.,

So does DC tax retirement income? Yes, most of it. Social Security, Tier 1 Railroad Retirement, government survivor benefits at 62 or older, and the DC disability income exclusion for qualifying disabled residents are the exceptions.

In This Guide

DC Retirement Income Tax at a Glance

Here is how the District of Columbia treats each common source of retirement income for tax years 2025 and 2026.

Income source How DC treats it
Social Security Not taxed. The federally taxable part is subtracted on Form D-40, Line 10.
Tier 1 Railroad Retirement Not taxed. Subtracted on the same line as Social Security.
Federal civil service, DC government and private pensions Taxed at DC rates of 4% to 10.75%.
Military retired pay Taxed at DC rates. No military retirement exclusion since tax year 2015.
Annuities Taxed when included in federal gross income.
IRA and 401(k) withdrawals Taxed when included in federal gross income.
DC or federal government survivor benefits Not taxed if you are 62 or older by the end of the tax year (D-40, Line 12).
Up to $10,000 of income from any source, for a resident the Social Security Administration has found permanently and totally disabled Excluded if the resident receives SSI, Social Security Disability, railroad retirement disability or federal or DC government disability payments and household AGI is under $100,000 (Schedule I, Line 7a); see the full test.

Each row above comes from the DC Code and the tax year 2025 forms.,

The starting point matters. D.C. Code section 47-1803.02 gives "gross income" the same meaning it has under section 61 of the Internal Revenue Code. In its 2022 testimony to the DC Council, the DC Office of Tax and Revenue (OTR) put it plainly: all income "is included in federal gross income and, therefore, is included in District income tax absent a specific statutory exclusion."

So the question for any retirement check is simple. Did it count as income on your federal return? If yes, DC taxes it, unless one of the exclusions below applies.

What DC Income Tax Rates Apply to Retirees?

DC has one graduated rate schedule for residents, set by D.C. Code section 47-1806.03 for taxable years beginning after December 31, 2021. No newer schedule has replaced it, so the same brackets govern tax years 2025 and 2026, for retirees and every other resident alike.

DC taxable income DC income tax
Not over $10,000 4% of 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 $250,000 $3,500 plus 8.5% of the excess over $60,000
Over $250,000 but not over $500,000 $19,650 plus 9.25% of the excess over $250,000
Over $500,000 but 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

These brackets are marginal: each rate applies only to the slice of taxable income inside its band. The DC Office of Tax and Revenue publishes the same rate table for tax years beginning after 12/31/2021.

What Happened to the DC Pension Exclusion?

The DC pension exclusion is gone. Under D.C. Code section 47-1803.02(a)(2)(N)(i), the District once excluded up to $3,000 of pension, military retired pay, or annuity income received from the District of Columbia or the federal government by residents 62 or older. The current DC Code limits the $3,000 DC pension exclusion to taxable years beginning before January 1, 2015.

Of the $3,000 pension exclusion, OTR told the DC Council in 2022 that the Fiscal Year 2015 Budget Support Act of 2014 "effectively repealed this exclusion for all tax years beginning on or after January 1, 2015." The Pension Exclusion and Restoration Act of 2021, Bill 24-0071, sought to restore the DC pension exclusion, yet the current Code text still limits it to tax years before 2015.

What that means for you, by type of retiree:

  • Federal retirees (CSRS or FERS): your federal pension is taxed at DC rates, with no $3,000 break.
  • DC government retirees: same answer. A District government pension that counts as federal income is taxed too.
  • Military retirees: military retired pay was inside the same repealed exclusion, and DC taxes it today.
  • Private-sector retirees: the old exclusion covered only District and federal government payments, so a private pension was never eligible and is taxed like any other income.

If an old worksheet or tax guide shows a $3,000 pension deduction, don't count on it when you set withholding or estimated payments.

Which Retirement Income Does DC Still Exclude?

Three kinds of retirement income stay out of DC taxable income.

Social Security and Railroad Retirement

D.C. Code section 47-1803.02(a)(2)(L) excludes Social Security and Tier 1 Railroad Retirement benefits subject to taxation under section 86 of the Internal Revenue Code from District gross income. In practice, you report your federal adjusted gross income on Form D-40, then subtract the taxable amount of your Social Security and Tier 1 Railroad Retirement on Line 10.

Government survivor benefits at 62 or older

DC excludes survivor benefits received from the District of Columbia or the federal government by a person who is 62 or older by the end of the tax year, under D.C. Code section 47-1803.02(a)(2)(N)(ii). Form D-40 subtracts them on Line 12 as "DC and federal government survivor benefits."

A surviving spouse of a federal or District government retiree should check the survivor-benefit exclusion first. If you turned 62 by December 31 of the tax year, the government survivor annuity you receive comes off your DC income.

The DC disability income exclusion

DC excludes up to $10,000 of income from any source for a resident whom the Social Security Administration has determined to have a permanent and total disability, under D.C. Code section 47-1803.02(a)(2)(V). To qualify for the DC disability income exclusion, you must also receive Supplemental Security Income or Social Security Disability, railroad retirement disability benefits, or federal or District of Columbia government disability payments.

To claim the DC disability income exclusion, household adjusted gross income must be under $100,000. OTR's Schedule I instructions say household income "includes income received by all household members in the year, even income excluded from federal adjusted gross income." You claim the disability income exclusion on Schedule I, Calculation B, Line 7a.

What This Means for Paying for Care

If you pay for home care, assisted living or a nursing home out of retirement savings, DC income tax is part of the bill.

Every dollar you pull from a traditional IRA or 401(k) that counts as federal income also counts as DC income, unless one of the exclusions above applies. A large one-time withdrawal can push part of your income into a higher bracket, from 6.5% to 8.5% once taxable income passes $60,000. Spreading withdrawals across tax years can keep more of that money in the lower brackets.

Social Security and Tier 1 Railroad Retirement are the main income streams DC income tax leaves alone, along with DC or federal government survivor benefits for someone 62 or older. Pension-heavy retirees feel DC income tax most, especially former federal and District workers who lost the $3,000 pension exclusion after 2014. If you have a choice of which income to lean on, that difference is worth a conversation with a tax professional before you withdraw.

For the federal rules on retirement-account withdrawals, including required minimum distributions and early-withdrawal penalties, see our guide to using retirement accounts to pay for care. To plan the order you draw on each source, read building a senior care funding plan. For District programs that help cover care costs, start with how to pay for senior care in Washington, DC.

Frequently Asked Questions

How much DC income tax does a $30,000 military pension owe?

If a $30,000 military pension is a retiree's only taxable income after deductions, DC income tax is $400 plus 6% of the $20,000 above $10,000, or $1,600 (hypothetical). Military retired pay gets no special treatment: the $3,000 DC exclusion for government pensions at 62 or older applies only to taxable years beginning before January 1, 2015.

What is the DC income tax on $100,000 of retirement income?

On $100,000 of DC taxable income, the DC rate table gives $3,500 plus 8.5% of the $40,000 above $60,000, or $6,900 (hypothetical). That $6,900 of DC income tax is 6.9% of the whole $100,000, even though the top slice is taxed at 8.5%, because DC's brackets are marginal.

Does a spouse's income count toward the $100,000 limit for the DC disability income exclusion?

Yes. OTR's Schedule I instructions count income received by all household members toward the $100,000 household income limit for the DC disability income exclusion, including income excluded from federal adjusted gross income. A disabled resident with modest income can still lose the disability income exclusion if a spouse's income pushes the household to $100,000 or more.

Who has to pay DC income tax?

OTR applies DC income tax to an individual who is domiciled in the District at any time during the tax year, or who maintains an abode in the District for 183 or more days during the year. A retiree who keeps a home in the District for most of the year should expect to file a DC return.

Learn More

FinancialHow to Pay for Senior Care in Washington, DCHow to pay for senior care in Washington, DC: a semi-private nursing home room runs $146,730 a year, and DC Medicaid's 2026 income limit is $2,982 a month. FinancialHow Each State Taxes Retirement IncomeRetirement income tax varies enormously by state. Learn how states treat Social Security, pensions, and IRA or 401(k) money, and find your state's rules. FinancialUsing Retirement Accounts to Pay for CareHow to use a retirement account to pay for senior care: the tax on IRA and 401(k) withdrawals, the early-penalty exceptions, RMDs at 73, and the tax-spike trap. FinancialBuilding a Senior Care Funding PlanA step-by-step plan to pay for senior care: estimate the cost, inventory income and assets, find the payers you qualify for, sequence them, and get free help. FinancialHow to Pay for Senior CareHow to pay for senior care: what it costs nationally and how Medicaid, Medicare, VA benefits, and private pay each fit. Who qualifies, what's covered, in 2026.

Find personalized help planning how to pay for senior care in DC at brevy.com.

The information on Brevy.com is for educational purposes only and is not a substitute for professional legal, financial, or medical advice. Rules vary by state and program and change frequently. Always verify with the relevant agency or a qualified professional. Brevy is not a law firm, financial advisor, or healthcare provider.

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