Updated October 29, 2026. Quick answer: Yes, in general. The 2025 D-40 booklet says “Include your taxable portion of pension/annuity in your federal adjusted gross income.” The old DC Code exclusion for government annuity income, which “shall not exceed the lesser of $3,000 or the actual amount” received, applied only to tax years beginning before 2015.
What District of Columbia does with a FERS or CSRS annuity
| Question | What the District of Columbia documents say |
|---|---|
| What the source says | The 2025 D-40 instructions tell filers to include the taxable portion of a pension or annuity in federal adjusted gross income, and the DC Code exclusion for pension income from the federal government applied only to taxable years beginning before January 1, 2015. |
| Change for 2026 | No 2026 change is printed in the state documents cited here. |
In the District of Columbia documents’ own words
- “annuity income received from the District of Columbia or the federal government” (DC Code 47-1803.02 Computation of taxable income)
- “shall apply for taxable years beginning before January 1, 2015.” (DC Code 47-1803.02 Computation of taxable income)
- “annuitant’s survivor and 62 years of age or older” (2025 D-40 Booklet (DC Individual Income Tax Forms and Instructions))
How this differs from other pensions in District of Columbia
The repealed exclusion covered pension, military retired pay, or annuity income received from the District or the federal government, capped at the lesser of $3,000 or the amount received. The sources read print no separate current rule for private pensions. See also Does District of Columbia tax annuity income? and military retirement pay.
FERS, CSRS and your TSP
The state documents cited here do not address TSP withdrawals. For the Thrift Savings Plan itself, see state tax on TSP withdrawals and the TSP calculator.
Where this rule sits on the District of Columbia return
DC computes taxable income under DC Code 47-1803.02, which lists the exclusions from gross income. The government pension exclusion in subparagraph (N) lapsed for tax years beginning in 2015, and a separate survivor benefit exclusion remains.
Checks before you rely on this answer
- Look through D-40 Schedule I for any subtraction that fits your own situation, since this page did not review every form line.
- If you receive survivor benefits from the District or the federal government at age 62 or older, check line 12 separately from your own annuity.
- Compare the taxable pension on your federal return with the amount carried into DC federal adjusted gross income.
What the District of Columbia documents leave open
The booklet text was searched for a current subtraction for federal civil service pensions and none was found, but not every form line was reviewed. The retirement related subtraction printed in the documents read is for survivor benefits, on Schedule I line 12, for an annuitant’s survivor age 62 or older. The rate schedule is a table not published here, and TSP withdrawals are not addressed.
Common mistakes
- Claiming the old $3,000 exclusion. The DC Code limits it to taxable years beginning before January 1, 2015.
- Taking the survivor benefit subtraction on your own annuity. It is for an annuitant’s survivor age 62 or older and does not include Social Security survivor benefits.
Related: Does District of Columbia tax annuity income?, District of Columbia military retirement pay, and FERS, TSP and Social Security sequencing.
Find the right next step for your situation
About how much do you have invested? Pick the range that fits; your next step appears immediately below.
Compare adviser services and total fees
For U.S. investors with $250,000 or more in investable assets. WiserAdvisor is an independent service matching you with 2 to 3 vetted advisers. Its form asks for your ZIP code and answers to a few questions; a match is not guaranteed.
Free to request, with no obligation to hire. By submitting, you consent to calls, texts and emails from WiserAdvisor and up to three advisers. Advisers pay for introductions.
Clear Money Guide may earn a referral payment for a qualifying completed form. An introduction is not a Clear Money Guide recommendation.
Opens on WiserAdvisor’s site in a new tab.
Explore optional adviser matching
Considering financial advice? Request an adviser introduction with no obligation to hire.
The form is run by Kapitalwise, our advisor-matching partner. Requesting an introduction is free. Submitting the form shares your contact details with advisers, so expect calls and texts. Advisers pay for introductions. Clear Money Guide may earn a referral payment for a qualifying submitted form, whether or not you hire anyone. A match is not guaranteed.
The Kapitalwise form opens here; you stay on this page.
What happens when you press the button
It asks about nine questions: age, investable assets, location; then your name, email and phone number, and verifies the phone by text. Nothing loads and nothing reaches Kapitalwise until you press the button.
Prefer flat-fee or hourly pricing instead? Compare ranges here.
Answer againSources
- 2025 D-40 Booklet (DC 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
- DC Code 47-1803.02 Computation of taxable income: https://code.dccouncil.gov/us/dc/council/code/sections/47-1803.02
Read from the state documents linked above on October 29, 2026. General information, not tax advice.