Key Takeaways
- Washington DC's top income tax rate is 10.75%
- DC uses a 183-day statutory residency test
- Federal employees and contractors can establish Florida domicile
- DC's unique jurisdiction doesn't exempt it from normal residency rules
Overview: DC Tax Burden
Washington DC has a 10.75% top income tax rate, among the highest in the nation. Many federal workers and contractors are establishing Florida residency while working remotely or after retirement.
$5,000 - $30,000+
Annual savings depending on income level
DC Tax Rates
| Taxable Income | Tax Rate |
|---|---|
| $0 - $10,000 | 4% |
| $10,001 - $40,000 | 6% |
| $40,001 - $60,000 | 6.5% |
| $60,001 - $250,000 | 8.5% |
| $250,001 - $500,000 | 9.25% |
| $500,001 - $1,000,000 | 9.75% |
| Over $1,000,000 | 10.75% |
Federal Employees and Contractors
Many DC residents work for the federal government or contractors:
- Remote federal workers: Can establish Florida domicile if working remotely
- Retiring federal employees: Florida domicile means no state tax on pension
- Contractors: Same rules as private sector employees
- Telework arrangements: Work from Florida, file taxes as FL resident
Federal Pensions: Florida doesn't tax federal retirement income. DC would tax 100% of it. For a federal retiree with a $60,000 pension, that's ~$4,500/year in savings.
Properly Exiting DC
- Establish Florida domicile (address, Declaration, DL, voter registration)
- Sell or rent DC property
- Update employer/OPM records to Florida address
- File DC part-year return (D-40) for move year
- Update TSP and retirement account addresses