Washington, D.C., Taxes: What You’ll Owe in the 2026 Tax Season

For example, a vehicle worth $25,000 that weighs 3,500 pounds and gets 22 miles per gallon would have its excise rate calculated as follows:

$25,000 x .06 (or 6%) = $1,500 excise tax. Many vehicles are exempt from the excise fee. A full list of exemptions can be found here.

• Alcohol: There’s a 10 percent tax on alcohol consumed on premises in a bar or restaurant, and a 10.25 percent tax on alcohol purchased in a store for off-site consumption. Those are instead of the general 6 percent sales tax.
• Lottery: For winnings of more than $5,000, D.C. withholds 25 percent for federal taxes and 8.5 percent for District income taxes.

Will my heirs or estate have to pay estate and inheritance tax?

D.C. has an estate tax on estates worth $4,988,400 or more if the death occurred in 2026. The tax rate includes a base amount plus a percentage that ranges from 11.2 to 16 percent, depending on the value of the estate. The District’s inheritance tax only applies to estates in which the death occurred prior to April 1, 1987.

Are there any tax breaks for older residents?

Senior assessment cap credit: This appears as an automatic credit on a property tax bill but is effectively capping the property tax increase at 2 percent each year for people 65 and older with income of $163,500 or less. The property must be receiving the homestead deduction and senior citizen or disabled owner real property tax relief to automatically receive this credit.

Homestead deduction: This reduces property taxes for residents by subtracting $91,950 from the assessed value of a home in 2026. This results in $781.50 in savings on an annual real property bill. To qualify, residents must apply with the Office of Tax and Revenue. The property must be the primary residence of the owner and contain no more than five dwelling units, which the District government says are rooms that provide permanent provisions for living, sleeping, eating, cooking and sanitation. More information is available here.

Disabled veterans homestead reduction: Veterans who have been classified as having a total and permanent disability due to a service-related injury or condition are eligible for this deduction. Veterans who receive payments for 100 percent disability due to inability to work are also eligible for this benefit, which is a $445,000 reduction in the assessed value of their property. To qualify, disabled veterans must also occupy the property as their principal residence, and it can’t have more than five dwelling units. Disabled veterans must also be able to show on their deed that they own at least 50 percent of the property. Total household income cannot exceed $163,500 for 2026. The online application can be found here.

Senior citizen or disabled property owner tax relief: Property owners who are 65 or older or disabled may file an application for this benefit, which reduces property taxes by 50 percent. The applicant must own at least 50 percent of the property, and the total 2024 federal adjusted gross income of everyone living at the property must be less than $163,500 for people pursuing the tax relief in 2026. The property must be the primary residence of the owner and contain no more than five dwelling units.

Low-income senior citizen property tax deferral: This program allows older residents to defer their entire annual tax bill if they have a total household adjusted gross income of less than $50,000. Other requirements include:

• Must have owned their home for at least one year prior to applying.
• Must have lived in the home during the prior 12 months.
• Must currently live in the property as their principal residence.

The program has two options: a deferral with 6 percent interest and a deferral with 0 percent interest.

To be eligible for the 6 percent interest rate, taxpayers must:

• Be 65 or older.
• Live in the District.
• Own at least 50 percent of a house or condo in the District.
• Live in the home as a principal place of residence.
• Have a total household AGI of less than $50,000
• Apply at Mytax.DC.gov

To be eligible for 0 percent interest, taxpayers must:

• Meet all the requirements above for the 6 percent deferral.
• Be 75 or older
• Have lived in and owned their principal residence in the District for the last 25 years
• Have house interest and dividend income below $12,500
• Apply at Mytax.DC.gov

The total of all deferred taxes, plus the annual interest of 6 percent accrued on the deferrals (if applicable), can’t be more than 25 percent of the property’s assessment for the real property tax year in which the deferrals are provided.

Applications are due March 31 each year to start deferring the first-half tax, or by Sept. 15 to start deferring with the second-half tax. Delinquent payments can also be deferred, as long as that’s outlined on the application.

Are military retirement pensions taxed?

D.C. taxes military pensions like other income.

What is the deadline for filing taxes in 2026?

The deadline for filing 2025 D.C. and federal taxes was April 15, 2026. Taxpayers could request a filing extension with the District and the IRS but must have paid estimated taxes by the April filing deadline to avoid penalties and interest. The extension deadline for both District and federal taxes is Oct. 15.

More AARP Financial Resources

• AARP Retirement Calculator Determine if you are saving enough to retire when — and how — you want.
• AARP Social Security Calculator Figure out when to claim and how to maximize your Social Security benefits.
• AARP Tax Tools Explore resources to help you calculate and prepare taxes.