Updated October 16, 2026. Quick answer: Only on a lump sum. The District’s notice says “The requirement to withhold is now limited to lump-sum distributions”, so regular pension payments to District residents are not withheld.
Washington, DC pension withholding at a glance
| Item | What the documents say |
|---|---|
| Is state withholding required on regular pension payments? | No on regular payments: withholding applies only to lump-sum distributions |
| Default rate if you give the payer no form | No default for periodic payments, because none is required. Where lump-sum withholding applies, it is at the highest District individual rate in effect |
| Lump sum or one-time payment | A lump-sum distribution (the resident payee’s entire account balance) is withheld at the highest District individual rate, except previously taxed portions and direct trustee-to-trustee or IRA-to-IRA rollovers |
| Form to start, change or stop it | No payee certificate named in the documents read |
| Changed for 2026? | The notice states no change; the Code lists a temporary 2026 amendment (D.C. Law 26-89) whose text was not read |
What the Washington, DC documents say
The District of Columbia repealed withholding on periodic and other non-lump-sum payments from retirement plans or accounts to District residents. The Office of Tax and Revenue’s Notice 2012-02 says “The requirement to withhold is now limited to lump-sum distributions”.
The statute, D.C. Code 47-1812.08(m), provides that “District income tax shall be withheld on the lump-sum distribution”, at the highest District individual income tax rate in effect. It excepts previously taxed portions and direct trustee-to-trustee eligible rollovers or IRA-to-IRA rollovers.
What a mover should know
This page is about Washington, DC as a state of residence. An instruction line written for a nonresident or part-year filer is not the rule for a resident, and none of the documents read settles a part-year or two-state case, so check each state’s own rule. The federal side is the same everywhere; CMG’s federal 20% withholding on a pension lump sum page covers it, state tax withholding on IRA and 401(k) withdrawals in Washington, DC covers the account side, and state withholding on retirement withdrawals lists the other states checked.
What the documents do not say
- The notice dates from 2012 and printed a top rate for its own date; that percentage is not repeated here because the documents read do not show the rate in effect today. The documents read name no payee certificate.
Common mistakes
- Reading a state with no withholding as a state with no tax; the tax can still be due when you file.
- Assuming the answer for one state applies to another, or that state withholding settles the state tax owed at filing.
Related: state tax withholding on IRA and 401(k) withdrawals in Washington, DC, Washington, DC retirement taxes, whether Washington, DC taxes pensions, state withholding on retirement withdrawals, and retirement withholding calculator.
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Answer againSources
- Revised Withholding Requirements on Distributions from Retirement Plans or Accounts, OTR Tax Notice 2012-02: https://otr.cfo.dc.gov/sites/default/files/dc/sites/otr/release_content/attachments/WH%20Retirement%20Plan%20Distribution%20Revision_0.pdf
- D.C. Code 47-1812.08, Withholding of tax: https://code.dccouncil.gov/us/dc/council/code/sections/47-1812.08
- IRS Tax Topic 413, Rollovers from retirement plans: https://www.irs.gov/taxtopics/tc413
Sources: the primary documents linked above, read on October 16, 2026. General information, not tax advice. Your own facts decide the outcome, and a tax professional or the state agency itself is the right place to confirm anything consequential.