Updated October 5, 2026. Quick answer: Yes. The District has no general pension or annuity exclusion in the Code text read. The D-40 booklet tells filers to “Include your taxable portion of pension/annuity in your federal adjusted” gross income, and the rate runs from 4% to 10.75%.
The same question for trust income: does District of Columbia tax trust income.
The same question for dividends and interest: does District of Columbia tax dividends and interest.
How District of Columbia treats annuity income
| Item | What the documents say |
|---|---|
| Treatment | Taxed as ordinary income through federal adjusted gross income |
| Rates | 4% on the first $10,000, then $400 plus 6% of the excess over $10,000, up to “$91,525, plus 10.75% of the excess over $1,000,000” |
| The old exclusion | A deduction of up to $3,000 for government pension and annuity income at 62 or older was written so that it “shall apply for taxable years beginning before January 1, 2015.” |
| Still excluded | Survivor benefits from District or federal government annuitants age 62 or older, and taxable Social Security, are subtracted separately |
| Purchased annuities | The booklet says only to include the taxable portion; non-qualified annuity income follows the federal taxable amount |
A $24,000 example
If $24,000 of annuity payments were a filer’s whole taxable income, the District tax would be $1,240, computed as $400 + 6% x ($24,000 minus $10,000), before any deduction the booklet allows, using the 6% bracket the booklet prints from $10,000 to $40,000.
What changes in 2026
The latest documents read print no 2026 change to the way annuity income is taxed.
Federal rules
The state’s treatment sits on top of the federal one. The IRS explains the federal side in Topic no. 410, Pensions and Annuities and Publication 575, Pension and Annuity Income.
Related: whether the District taxes military retirement pay, whether the District taxes capital gains, state tax on annuity income by state, state tax on 401(k) and IRA withdrawals, how a surrendered annuity is taxed, and pension and annuity decisions.
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Answer againSources
- 2025 D-40 Individual Income Tax Booklet (DC Office of Tax and Revenue): 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 (DC Council Code): https://code.dccouncil.gov/us/dc/council/code/sections/47-1803.02
- D.C. Code 47-1806.03, Rates of tax (DC Council Code): https://code.dccouncil.gov/us/dc/council/code/sections/47-1806.03
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.