2026 edition · statute-cited · part of Clear Money Guide’s 51-state retirement tax series. This guide covers state taxes on retirement income and estate transfers; property and sales taxes vary by county and are outside its scope.
Updated July 24, 2026. Quick answer: The District taxes retirement harder than any state on its borders: pensions, 401(k) and IRA withdrawals are fully taxable with no retirement exclusion of any kind — the old $3,000 exclusion for DC/federal government pensions was repealed back in 2015, and even military retirement is fully taxable, which almost no state does. Rates run from 4% to 10.75%. Social Security is the one full exemption. At death, DC levies an estate tax with a 2026 zero-bracket of $4,988,400 (CPI-indexed) and rates of 11.2% to 16%.
What the District doesn’t exempt (the list is short because the exemptions are)
DC’s distinction is the absence of carve-outs: no age-based exclusion, no pension modification, no government-pension break since D.C. Law 20-155 repealed the $3,000 exclusion for tax years after 2014 (D.C. Code §47-1803.02(a)(2)(N)(i) limits it to years before 2015; a restoration bill, B24-0071, went nowhere) — and, uniquely for the region, no military retirement exemption at all. A federal retiree living in the District pays full DC rates on a pension that Virginia would partially shelter and Pennsylvania would ignore entirely. Social Security’s full exemption is the code’s single retiree concession.
How the District taxes retirement income (statute-cited)
| Income tax | Graduated, 6 brackets, 4% to 10.75% |
| Social Security | Not taxed (excluded) |
| Pension / 401(k) / IRA | Fully taxable — no retirement exclusion (the $3,000 government-pension exclusion was repealed for tax years after 2014, D.C. Law 20-155) |
| Military retirement | Fully taxable — no exclusion |
| Estate tax | Yes — 2026 zero-bracket $4,988,400 (up from $4,873,200 in 2025, CPI-indexed); rates 11.2% to 16% |
| Inheritance tax | None |
Probate: reasonable fees and a freshly doubled small-estate lane
Personal-representative and attorney compensation is reasonable (D.C. Code §20-751 et seq.) — no percentage schedule. The fresh change: small-estate administration now covers estates up to $80,000 (D.C. Code §20-351, as amended by D.C. Law 25-302, the Strengthening Probate Administration Amendment Act of 2024). Full table: estate tax by state. Context: probate cost by state · small-estate limits by state.
Is Washington, D.C. a good place to retire for taxes?
For retirement income, no — it is the region’s most expensive jurisdiction: every withdrawal dollar taxed at up to 10.75%, no senior shelter, and the rare full taxation of military pensions. Social Security’s exemption and the CPI-indexed estate threshold are the softeners. The cross-border arithmetic is stark enough to be the whole story: the same federal pension is partially sheltered in Virginia, fully exempt in Pennsylvania, and untaxed at withdrawal in no-tax states — which is why DC-area retirees so often keep the job’s city and change the home’s state.
D.C. vs. common alternatives
| State | Social Security | Pension / 401(k) / IRA | Estate tax | Inheritance tax |
|---|---|---|---|---|
| Washington, D.C. | Not taxed | Fully taxable (to 10.75%) — no retirement exclusion | Yes — $4.99M zero-bracket (2026) | None |
| Maryland | Not taxed | Pension exclusion up to $41,200 at 65+ (not IRAs) | Yes — $5M exemption | Yes — 10% collateral heirs |
| Virginia | Not taxed | Taxable; age deduction up to $12,000 (income-tested) | None (repealed 2007) | None |
| Florida | Not taxed | Not taxed (no income tax) | None | None |
Comparison rows summarize general rules; see our 51-state retirement tax table for statute-cited detail.
Considering a Roth conversion? The converted amount is taxed as ordinary income in the year you convert, and the District of Columbia may treat it differently from the retirement income above — see how all 51 jurisdictions tax Roth conversions.
Finding a financial advisor in the District of Columbia
Per the SEC’s July 2026 Investment Adviser roster, the District of Columbia has 59 SEC-registered advisory firms (#37 nationally) managing $549.0 billion (#25 by AUM). Full breakdown: the District of Columbia advisor statistics. Reviewing fee structures: fee-drag calculator.
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Cite or share this guide
Suggested citation: Clear Money Guide, “Washington, D.C. Retirement Taxes (2026 edition),” statute-cited; clearmoneyguide.com/washington-dc-retirement-taxes/. Free to cite with attribution and a link. Data verified July 23–24, 2026 against state statutes, session laws, and revenue-department guidance.
Primary sources
- https://code.dccouncil.gov/us/dc/council/code/sections/47-1803.02
- https://cfo.dc.gov/sites/default/files/dc/sites/ocfo/release_content/attachments/OTR%20Testimony%20on%20Pension%20Exclusion%20and%20Restoration%20Act%20of%202021.pdf
- https://taxfoundation.org/data/all/state/state-income-tax-rates-2026/
- https://otr.cfo.dc.gov/release/notice-oct-1-2025-tax-changes
- https://code.dccouncil.gov/us/dc/council/code/sections/20-351
- https://code.dccouncil.gov/us/dc/council/laws/25-302