Updated October 5, 2026. Quick answer: Yes. The District taxes trust income at graduated rates of 4% to 10.75%, and the Office of Tax and Revenue’s rate page introduces its schedule with the words “DC estate or trust is subject to tax at the following rates”.
How District of Columbia treats trust income
| Item | What the documents say |
|---|---|
| Treatment | The Office of Tax and Revenue states that the taxable income of a DC estate or trust is taxed at the same rate schedule it prints for individuals. In the source’s words, “DC estate or trust is subject to tax at the following rates” and the schedule is printed on the same page as the individual rates. |
| Who counts as a resident trust | D.C. Code 47-1809.01 turns on where the creator was domiciled. A trust created by a will is resident if the decedent was domiciled in the District at death, and a trust not created by a will is resident when the creator was domiciled there at creation or when “the trust consists of property of a person domiciled within the District”. A trust that results from the dissolution of a District corporation is also resident. |
| Fiduciary residence | Where the trustee lives does not decide the classification, according to D.C. Code 47-1809.02, which says the “residence or situs of the fiduciary shall not control the classification” of an estate or trust. |
| Rate on trust income | The 2025 D-41 Calculation C schedule runs from 4% on the first $10,000 of taxable fiduciary income to a top bracket that reads “$91,525, plus 10.75% of the excess above $1,000,000” for taxable income over $1,000,000. |
| Distribution deduction | D.C. Code 47-1809.05 allows an additional deduction in computing trust net income for amounts “which is to be distributed currently by the fiduciary to the beneficiaries” and the amount deducted is included in the net income of the beneficiaries. The D-41 carries a matching deduction line taken from federal Form 1041. |
| Trust deduction | The D-41 instructions give trusts a flat $100 deduction on Line 11. The source says: “Enter $100 for trusts.” The booklet does not present this as a personal exemption. |
| Nonresident trusts | The documents read do not state how a nonresident trust is taxed or whether it files a D-41. The booklet only says that DC resident beneficiaries “must report income paid or payable from a resident or nonresident trust” on their own returns. |
| Return to file | A fiduciary of a DC trust files Form D-41, the Fiduciary Income Tax Return, and the booklet sets the 2025 filing deadline at April 15, 2026 for calendar year filers. It applies “if you are the fiduciary of a DC estate or trust and” the gross income thresholds in the booklet are met. |
A $10,000 example
The tax on $10,000 of taxable income a trust keeps depends on the bracket it lands in. Taxed wholly at the lowest printed rate, 4%, the tax is computed as $10,000 x 4% = $400; taxed wholly at the highest, 10.75%, it is computed as $10,000 x 10.75% = $1,075. The state’s own schedule decides which applies. Federal tax on the trust’s income still applies.
Income the trust passes out to a beneficiary is handled as the distribution deduction row above describes.
What changes in 2026
The latest documents read print no 2026 change to how trust income is taxed.
Federal rules
The state’s treatment sits on top of the federal one. The federal brackets a trust faces are laid out in trust tax brackets versus individual brackets, and capital gains that a trust keeps are covered in capital gains stay in the trust. The IRS explains the federal return in the About Form 1041 page.
Related: what a living trust costs in District of Columbia, whether the District taxes capital gains, federal trust tax brackets, and trust income tax by state.
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Answer againSources
- 2025 D-41 Fiduciary Income Tax Forms and Instructions booklet (Office of Tax and Revenue): https://otr.cfo.dc.gov/sites/default/files/dc/sites/otr/publication/attachments/2025_D41_Book_Final_wLinks_02232026.pdf
- DC Individual and Fiduciary Income Tax Rates (Office of Tax and Revenue): https://otr.cfo.dc.gov/page/dc-individual-and-fiduciary-income-tax-rates
- D.C. Code 47-1809.01 Residency definitions: https://code.dccouncil.gov/us/dc/council/code/sections/47-1809.01
- D.C. Code 47-1809.02 Effect of residence or situs of fiduciary: https://code.dccouncil.gov/us/dc/council/code/sections/47-1809.02
- D.C. Code 47-1809.03 Imposition: https://code.dccouncil.gov/us/dc/council/code/sections/47-1809.03
- D.C. Code 47-1809.05 Net income: https://code.dccouncil.gov/us/dc/council/code/sections/47-1809.05
Sources: the primary documents linked above, read on October 5, 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.