How District of Columbia taxes retirement income
District of Columbia does not tax Social Security benefits. Pensions and 401(k)/IRA withdrawals are taxed as ordinary income. DC Code 47-1803.02(a)(2)(L) excludes Social Security and Tier 1 railroad retirement benefits from DC gross income, so DC does not tax Social Security. The general $3,000 pension/annuity exclusion for DC or federal retirees age 62+ (subsection (a)(2)(N)(i)) expired after tax year 2014 (D.C. Law 20-155) and no longer applies; only a narrow survivor-benefit exclusion for DC/federal survivor annuitants 62+ remains (subsection (a)(2)(N)(ii)). Ordinary pensions, 401(k) and IRA distributions are fully taxable as regular income with no current DC-specific exclusion.
Retirement income tax in District of Columbia, at a glance
| Income type | Taxed by District of Columbia? |
|---|---|
| Social Security | No |
| Pensions | Yes |
| 401(k) / IRA withdrawals | Yes |
| Estate / inheritance tax | Estate tax (exemption $4,988,400) |
| Avg. property tax rate | 0.58% of home value |
Does District of Columbia tax Social Security benefits?
No. District of Columbia does not tax Social Security benefits.
Does District of Columbia tax pensions and 401(k) or IRA withdrawals?
Yes. District of Columbia taxes pension income and 401(k)/IRA withdrawals as ordinary income. DC Code 47-1803.02(a)(2)(L) excludes Social Security and Tier 1 railroad retirement benefits from DC gross income, so DC does not tax Social Security. The general $3,000 pension/annuity exclusion for DC or federal retirees age 62+ (subsection (a)(2)(N)(i)) expired after tax year 2014 (D.C. Law 20-155) and no longer applies; only a narrow survivor-benefit exclusion for DC/federal survivor annuitants 62+ remains (subsection (a)(2)(N)(ii)). Ordinary pensions, 401(k) and IRA distributions are fully taxable as regular income with no current DC-specific exclusion.
For the mechanics of required withdrawals in retirement, see what is an RMD.
Sources
- District of Columbia taxation of retirement income (Social Security, pensions, 401(k)/IRA): District of Columbia Department of Revenue / Taxation.
- District of Columbia estate / inheritance tax: District of Columbia tax authority.