Updated October 4, 2026. Quick answer: Yes. Washington, D.C. taxes 401(k) and IRA withdrawals as income. The 2025 D-40 booklet says: “Include your taxable portion of pension/annuity in your federal adjusted gross income”. The Schedule I subtraction list read for this page has no line for private retirement-account withdrawals, and the top rate is 10.75%.
Withdrawing from an IRA or 401(k)? Whether the state withholds tax from it, from its own documents: Washington, DC tax withholding on IRA and 401(k) withdrawals.
Inheriting from, or planning for, someone in this state? Whether the state has an inheritance tax, from its own tax documents: Does Washington, D.C. have an inheritance tax?.
What Washington, D.C. does with 401(k) and IRA withdrawals
The Code’s old exclusion for pensions from the District or federal government applied only for years before 2015: the Code says it “shall apply for taxable years beginning before January 1, 2015”. The exclusion that remains covers “Survivor benefits received from the District of Columbia or the federal government” for people 62 or older. No D.C. document read for this page uses the words 401(k) or IRA in its pension guidance, so the answer rests on the booklet’s rule that taxable pension and annuity income is part of federal adjusted gross income, and on the absence of any private-plan subtraction.
| Item | What the documents say |
|---|---|
| Treatment | Taxable; no subtraction printed for private 401(k) or IRA withdrawals |
| State rates | Graduated, 4% on the first $10,000 up to 10.75% over $1,000,000 (2025) |
| Source | D.C. Office of Tax and Revenue, 2025 D-40 booklet and Schedule I; D.C. Code 47-1803.02 and 47-1806.03 |
A $40,000 withdrawal
All $40,000 of a traditional withdrawal is part of D.C. income. If $40,000 were your whole taxable income, the schedule’s “$400, plus 6% of the excess over $10,000” gives $2,200 (computed as $400 plus 6% of the $30,000 above $10,000), before any deduction or credit that lowers it.
What changes in 2026
The documents read print no 2026 rate schedule or subtraction change.
Federal rules
The state’s treatment sits on top of the federal one. The IRS explains the federal tax on these withdrawals in Publication 590-B, Distributions from Individual Retirement Arrangements and Publication 575, Pension and Annuity Income.
Related: whether Washington, D.C. taxes pensions, how Washington, D.C. taxes retirement income, whether Washington, D.C. taxes Roth conversions, and the state-by-state table of 401(k) and IRA withdrawal tax.
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Answer againSources
- 2025 D-40 Booklet: District of Columbia Individual Income Tax Forms and Instructions: https://otr.cfo.dc.gov/sites/default/files/dc/sites/otr/publication/attachments/2025_D40_Book_082026_v1.pdf
- D.C. Code 47-1803.02, Gross income defined (exclusions): https://code.dccouncil.gov/us/dc/council/code/sections/47-1803.02
- 2025 Schedule I, Additions to and Subtractions from Federal Adjusted Gross Income: https://otr.cfo.dc.gov/sites/default/files/dc/sites/otr/publication/attachments/2025_Schedule_I_021226.pdf
- D.C. Code 47-1806.03, Tax on residents and nonresidents, imposition and rates: https://code.dccouncil.gov/us/dc/council/code/sections/47-1806.03
Sources: the primary documents linked above, read on October 4, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.