Capital Gains Tax in District of Columbia (2026)
The District of Columbia has no special capital gains rate — DC taxes your gain as ordinary income at 4% to 10.75%, stacked on top of the federal 0/15/20% tax and the 3.8% NIIT. Run the combined number below.
Reviewed & updated · 2026 tax-year figures · Federal + District of Columbia state
The District of Columbia does not have a preferential long-term capital gains rate. Under DC Code §47-1806.03, both short- and long-term gains are taxed as ordinary income at 4%–10.75%, with the top 10.75% rate on taxable income over $1,000,000. That tax is added on top of the federal capital gains tax (0/15/20% long-term under IRC §1(h)) and the 3.8% NIIT (§1411). A top-bracket DC resident can face a combined rate near 34.6% on a long-term gain.
Net proceeds $174,800$26,200
Show our work federal + DC, step by step
Estimates only, for the 2026 tax year. Not tax advice. DC's bracket thresholds are fixed by statute (DC Code §47-1806.03) and are not inflation-indexed. The standard deduction equals the federal standard deduction — projected 2026 amounts of $16,100 single / $32,200 joint (est.), matching the federal engine. Figures are owner-verifiable against the DC Office of Tax and Revenue.
How does District of Columbia tax capital gains?
The District of Columbia gives capital gains no break at all. Under DC Code §47-1806.03, a capital gain is simply part of your DC taxable income and is taxed at the same graduated rates as wages — 4% at the bottom to 10.75% at the top. There is no equivalent of the federal 0/15/20% long-term schedule and no distinction between short-term and long-term at the District level. Whether you held the asset a week or a decade, DC taxes the whole gain as ordinary income.
DC's top rates are among the highest in the country, and a capital gain is exactly the kind of event that reaches them. The Tax Fairness Amendment, permanent since 2022, narrowed the 8.5% bracket to $60,000–$250,000 and added three high-income brackets: 9.25% over $250,000, 9.75% over $500,000, and 10.75% over $1,000,000. Because these thresholds are fixed (not inflation-indexed), a large one-time gain from selling a business, a rowhouse, or a block of stock can push a household into the 9.75% or 10.75% band for a single year. The same brackets apply to every filing status; only the standard deduction differs.
How does District of Columbia stack on top of federal?
The two systems run in parallel and the amounts are added — District of Columbia does not replace or absorb the federal tax. For a long-term gain, you owe:
- Federal: 0%, 15%, or 20% depending on where the gain stacks on your taxable income, under IRC §1(h);
- Federal NIIT: an extra 3.8% on net investment income once MAGI passes $200,000 (single) / $250,000 (joint), under IRC §1411; and
- District of Columbia: your marginal DC rate, 4%–10.75% (higher bands begin at $250k, $500k, and $1M of taxable income), on the full gain under DC Code §47-1806.03.
Add those together and a top-bracket DC resident with a long-term gain can pay roughly 20% + 3.8% + 10.75% ≈ 34.6%. A short-term gain is worse, because the federal side jumps to ordinary rates (up to 37%) instead of 20%. The calculator above computes each layer separately and shows you the exact bands.
What are the 2026 District of Columbia income-tax brackets?
The District applies the same bracket thresholds to every filing status — single, married, and head of household alike (only the standard deduction differs). These thresholds are fixed by statute and owner-verifiable against the DC Office of Tax and Revenue.
| DC taxable income (all filers) | Marginal rate |
|---|---|
| $0 – $10,000 | 4% |
| $10,000 – $40,000 | 6% |
| $40,000 – $60,000 | 6.5% |
| $60,000 – $250,000 | 8.5% |
| $250,000 – $500,000 | 9.25% |
| $500,000 – $1,000,000 | 9.75% |
| Over $1,000,000 | 10.75% |
How this calculator works & where the numbers come from
No black box. The federal side uses the same unit-tested engine as our main calculator: net gain = proceeds − basis; classify by holding period; for long-term gains, subtract the standard deduction and stack the gain across the 0/15/20% bands per IRC §1(h); add 3.8% NIIT where modified AGI crosses the §1411 threshold; short-term gains are computed as the true marginal difference in ordinary tax. The District of Columbia side takes the same taxable gain (after any §121 exclusion, since DC begins from federal AGI), subtracts the DC standard deduction (equal to the federal amount) from your ordinary income, and stacks the gain across the DC marginal brackets (4% through 10.75%) under DC Code §47-1806.03. A large gain can reach the 9.25%, 9.75%, or 10.75% high-income bands. The two results are summed.
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Primary sources (linked, not just named)
- DC Code §47-1806.03 — imposition & rates of tax
- DC Office of Tax and Revenue
- DC OTR — individual income tax
- 26 U.S.C. §1(h) — federal capital gains rates
- 26 U.S.C. §1411 — 3.8% NIIT
- 26 U.S.C. §121 — home-sale exclusion
- IRS Topic No. 409 — Capital Gains and Losses
- IRS Publication 550 — Investment Income
District of Columbia capital gains tax, answered
Does District of Columbia have a separate capital gains tax rate?
No. The District of Columbia has no preferential capital gains rate. Under DC Code §47-1806.03, a capital gain — short-term or long-term — is taxed as ordinary income at DC's graduated rates of 4% to 10.75%, with the top rate on taxable income over $1,000,000. The federal short/long distinction does not exist at the District level.
How much is capital gains tax in District of Columbia for 2026?
Your DC tax equals the gain taxed at your marginal DC rate (4%–10.75%), added to the federal capital gains tax. Federally, a long-term gain is taxed at 0/15/20% (IRC §1(h)) plus 3.8% NIIT for high earners. A mid-income DC resident might pay roughly 15% federal + 8.5% DC; a top earner can pay near 20% + 3.8% + 10.75% ≈ 34.6% combined. Use the calculator above for your exact figure.
How does District of Columbia capital gains tax stack on top of federal?
They are computed separately and summed. The federal side taxes long-term gains at 0/15/20% and adds 3.8% NIIT for high earners; short-term gains are ordinary income. The District of Columbia ignores the holding period and taxes the entire gain as ordinary income at 4%–10.75%. Your total tax is federal + NIIT + DC.
Why is DC's top rate 10.75%, one of the highest in the country?
The DC Tax Fairness Amendment (permanent since 2022) added high-income brackets. On top of the 8.5% bracket ($60k–$250k), DC now taxes taxable income at 9.25% over $250,000, 9.75% over $500,000, and 10.75% over $1,000,000. Because a large capital gain stacks on your other income, a single big sale can push you into the 9.75% or 10.75% band for that year — the calculator applies each band automatically.
Does the 3.8% federal NIIT apply to DC residents?
Yes — the NIIT is federal and applies in every state. Once modified AGI exceeds $200,000 (single) or $250,000 (married filing jointly), the 3.8% surtax under IRC §1411 hits the lesser of your net investment income or the amount over the threshold. It is added to your federal capital gains tax and is entirely separate from District of Columbia state tax.
Does District of Columbia conform to the $250k/$500k home-sale exclusion?
Yes. DC begins from federal adjusted gross income, so the IRC §121 exclusion of up to $250,000 ($500,000 married filing jointly) on a primary residence is already removed before DC applies its rate. Only gain above the exclusion is taxed, as ordinary income. See our home-sale hub for the mechanics.
Compare DC with other state hubs
The District's top 10.75% on capital gains is among the heaviest in the nation — above New York (over 10%) for most incomes, and approaching California (up to 13.3%). It sits far above flat-tax Pennsylvania (3.07%) and Ohio (3.5%), and worlds apart from no-income-tax neighbors like Texas and Florida. Every page combines the same unit-tested federal engine with that jurisdiction's own rules, so you always see the full combined number. The main Capital Gains Tax Calculator lets you fold any rate into your federal receipt.