District of Columbia taxes

The District taxes personal income at 4% to 10.75%. It also taxes businesses directly. An unincorporated business, even one person working alone, pays a franchise tax of 8.25% once its gross income passes $12,000. Every corporation pays 8.25%, and the District treats S corporations as C corporations. Both taxes have a $250 minimum that is owed even in a loss year. LLCs and corporations also file a $300 report every two years.

Personal income tax

DC residents file Form D-40. The rate is 4% on the first $10,000, 6% on the next $30,000, 6.5% on the next $20,000, 8.5% on the next $190,000, 9.25% on the next $250,000, 9.75% on the next $500,000, 10.75% on everything above $1,000,000 of taxable income. The same steps apply to every filing status.

The District sets its own standard deduction, not the federal one, and it has no personal exemption. You must take the same type of deduction here that you took on your federal return. Social Security and unemployment benefits are not taxed.

A resident without health coverage owes a shared responsibility payment on Form D-40. It is the greater of a flat amount for each person without coverage and 2.5% of income above the District filing threshold.

Return

Form D-40

Rates

4%, 6%, 6.5%, 8.5%, 9.25%, 9.75%, 10.75%

Standard deduction

$15,000 single or married filing separately, $22,500 head of household, $30,000 married filing jointly

Age 65 or over, or blind

$1,600 more for each, or $2,000 for a single or head of household filer

Personal exemption

None

Not taxed

Social Security, tier 1 Railroad Retirement and unemployment benefits

Earned income credit

100% of the federal credit, and refundable

Health coverage payment

For a full year without coverage, $795 for each adult and $397.50 for each child under 18, up to $2,385 for the household, or 2.5% of income above the filing threshold if that is more

Sole proprietor

The District treats one person running a business as an unincorporated business in its own right, so a sole proprietor can owe a business tax on top of the personal return. If your gross income is over $12,000 you file Form D-30 and pay the unincorporated business franchise tax: 8.25% of DC taxable income, and at least $250, or $1,000 when DC gross receipts are over $1,000,000. The minimum is owed even in a year you made a loss. At $12,000 or less you file the D-30N affidavit instead.

There is an exemption when more than 80% of gross income comes from personal services the owners actually perform and capital is not a material income-producing factor. That fits many consultants and freelancers. Income already taxed on Form D-30 is not taxed again on your Form D-40.

Single-member LLC

A single-member LLC is an unincorporated business too, so the Form D-30 rules above apply the same way: 8.25% of DC taxable income, a $250 minimum, and the same $12,000 and personal-services exemptions.

An LLC also files a biennial report, Form BRA-25, with the Department of Licensing and Consumer Protection, a different agency from the Office of Tax and Revenue. It costs $300 every two years, whatever the business earned. It is due April 1 of the year after the entity registered, then every second April 1. Filing late adds $100.

Partnership

A partnership that carries on a trade or business in the District with gross income over $12,000 files Form D-30 and pays the unincorporated business franchise tax: 8.25% of DC taxable income, never less than $250. The personal-services exemption applies here too. Every other partnership files Form D-65, the partnership return of income, which carries no tax.

An LLC taxed as a partnership also owes the $300 biennial report every two years. A general partnership registers nothing and files none. A limited partnership should check its own fee, because the District's fee table does not list one.

S corporation

The District does not recognize S corporations. It taxes them as C corporations, so an S corporation files Form D-20 and pays the corporation franchise tax at 8.25% of its DC taxable income, like any other corporation.

It pays at least the minimum tax, $250 where DC gross receipts are $1,000,000 or less and $1,000 above that, even in a loss year. It also owes the $300 biennial report every two years.

C corporation

A C corporation files Form D-20, due April 15, and pays the corporation franchise tax at 8.25% of the income apportioned to the District. A corporation that also trades outside DC counts only its DC share, measured by DC sales over total sales.

It pays at least the minimum tax, even in a loss year: $250 where DC gross receipts are $1,000,000 or less and $1,000 above that. The minimum is the least the tax can be, not an extra charge. The $12,000 and personal-services exemptions do not apply to a corporation, and in a combined group each member works out its own minimum. The $300 biennial report is owed every two years.

Return

Form D-20, due April 15

Franchise tax

8.25% of DC taxable income

Minimum tax

$250 up to $1,000,000 of DC gross receipts, $1,000 above

Multi-state profit

DC sales over total sales

Biennial report

$300 every two years

Estimate your state tax

Pick your business type and enter this year's numbers to see the state business tax District of Columbia charges. It assumes all your sales are in District of Columbia.

An estimate for planning, not tax advice.

Sources

• District of Columbia 2025 D-40 individual income tax booklet (otr.cfo.dc.gov)
• otr.cfo.dc.gov 2024 D-30 Unincorporated Business Franchise Tax booklet (who must file, minimum tax, exemptions)
• otr.cfo.dc.gov DC Business Franchise Tax Rates
• otr.cfo.dc.gov 2025 D-20 Corporation Franchise Tax booklet (who must file; S corporations are C corporations; minimum tax worksheet)
• otr.cfo.dc.gov 2025 D-65 Partnership Return of Income instructions (D-30 versus D-65; the $12,000 threshold; the 80% personal-services exclusion)
• dlcp.dc.gov Corporations Division Fees: Business Corporation and Limited Liability Company (biennial report $300, late fee $100)
• dlcp.dc.gov Corporations Division Business Registration FAQs (BRA-25; first report due 1 April of the following year, then every two years)
• otr.cfo.dc.gov 2025 D-20 Corporation Franchise Tax Forms and Instructions: "The tax rate is 8.25%", the single sales factor, and the Minimum Tax Liability Gross Receipts (MTLGR) worksheet

Last reviewed August 2026.