Updated October 4, 2026. Quick answer: Yes, on the statute text read. D.C. Code 47-1803.02 once excluded “Pension, military retired pay, or annuity income received from the District” up to the lesser of $3,000 or the amount received for people 62 or older, but that rule applies only to taxable years beginning before January 1, 2015.
The same question for dividends and interest: does District of Columbia tax dividends and interest.
The same question for annuity payments: does District of Columbia tax annuity income.
How District of Columbia treats military retired pay
| Item | What the documents say |
|---|---|
| Treatment | No current exclusion for military retired pay appears in the section read; it is part of D.C. gross income |
| The old rule | An exclusion of up to $3,000 for a person 62 or older, for taxable years beginning before January 1, 2015 |
| Rate | Not printed in the section read |
| Not checked | The Office of Tax and Revenue D-40 instruction booklet was not retrieved, so the current filing line is inferred from the statute’s date limit |
A $30,000 example
A retiree with $30,000 of military retired pay has no exclusion to subtract under the section read, so the pay stays in D.C. gross income and is taxed at the District’s rates, which this document does not print.
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What changes in 2026
No 2026 change is printed in the documents read, and the section’s own date limit means the $3,000 exclusion is not available for 2025 or 2026.
Federal rules
The state’s treatment sits on top of the federal one. The IRS explains the federal side in Publication 3, Armed Forces’ Tax Guide.
Related: military retirement pay by state, and the military retirement calculator.
Sources
- D.C. Code section 47-1803.02, Gross income defined (exclusions): https://code.dccouncil.gov/us/dc/council/code/sections/47-1803.02
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.