District of Columbia Administrative Code

104 SALARY DEDUCTIONS: UNINCORPORATED BUSINESSES 104.1 Unincorporated businesses not exempt from taxation shall be allowed an aggregate reasonable salary allowance for services rendered by the individual owners or members actively engaged in the conduct of the business. The salar…

105 GENERAL REQUIREMENTS FOR FILING TAX RETURNS (INCLUDING ELECTRONIC [INTERNET] FILING) 105.1 All returns required under Title 5 of the Tax Clarity Act of 2000 (hereinafter ‘the Act’) shall be filed on the forms and in the manner prescribed by the Deputy Chief Financial Officer.…

106 TIME AND PLACE FOR FILING TAX RETURNS 106.1 All returns of income for the preceding taxable year required to be filed under the provisions of the Act shall be filed with the Deputy Chief Financial Officer on or before the 15th day of April of each year; Provided, that returns…

107 TAX RETURNS OF UNINCORPORATED BUSINESSES 107.1 Returns shall be filed by every unincorporated business engaging in or carrying on any trade or business within the District or receiving income from sources within the District having a gross income of more than twelve thousand …

108 TAX RETURNS OF PARTNERSHIPS 108.1 Returns shall be filed by every partnership engaging in any trade or business or receiving income from sources within the District. 108.2 If a partnership is not required to file an unincorporated business return under certain conditions, it …

109 CONSOLIDATED TAX RETURNS 109.1 District of Columbia affiliated group means an "affiliated group" as defined in § 1504 of the Internal Revenue Code of 1986, as amended (IRC). Generally, District of Columbia affiliated groups shall not include any corporation that does not have…

110 DISCLOSURE OF TAX RETURN INFORMATION 110.1 The Deputy Chief Financial Officer, in his or her discretion, may divulge or make known any information contained in, or related to, any report, application, license, or return required under the provisions of the Act, except the fol…

111 INFORMATION RETURNS 111.1 Each person making payments of fixed or determinable income of six hundred dollars ($ 600) or more in the aggregate in any calendar year to a resident shall render a return of the payments for that year on or before February 28th of the following yea…

112 OPTIONAL TAX COMPUTATION FOR D.C. RESIDENTS 112.1 Any resident other than a fiduciary, may elect to compute the tax due in accordance with the Optional Tax Table(s) if taxable income is less than fifty thousand dollars ($ 50,000). 112.2 [Deleted] 30 DCR 1255, 1256 (March 18, …

113 PROPERTY TAX CREDIT 113.1 If a claimant or member of the household uses part of the dwelling house for business purposes, or part of the dwelling house is rented to someone who is not a member of the household, property taxes accrued or amount of rent used in determining prop…

114 CREDITS FOR INDIVIDUAL INCOME TAX PAID TO OTHER JURISDICTIONS AND CAMPAIGN CONTRIBUTIONS 114.1 Any resident claiming credit on his or her individual income tax return, Form D-40, for income tax required to be paid for the taxable year to another state, territory or possession…

115 CREDIT FOR TAX WITHHELD ON WAGES 115.1 The tax deducted and withheld at the source upon wages under the provisions of § 8(b) and § 8(c) of Title 12 of the Act shall be allowable as a credit against the tax imposed by § 3 of Title 6 of the Act upon the recipient of the income.…

116 TAX ON CORPORATIONS AND FINANCIAL INSTITUTIONS 116.1 The taxable income of corporations and financial institutions under Title 7 is defined to mean "the amount of net income derived from sources within the District within the meaning of Title 10 of the Act;" therefore, to det…

117 TAX ON UNINCORPORATED BUSINESSES 117.1 The design of the unincorporated business tax under the law is to impose a tax upon all business income which would be subject to the corporation franchise tax (as though the business were incorporated), without regard to whether the bus…

118 UNINCORPORATED BUSINESS OF A DECEDENT 118.1 The unincorporated business of a decedent which is carried on by an executor or administrator shall be taxable. 118.2 If a receiver or trustee continues the business of an individual or partnership and is duly authorized to continue…

119 TAX COMPUTATIONS FOR UNINCORPORATED BUSINESSES 119.1 As in the case of corporations, the phrase "taxable income" of unincorporated business means the amount of net income derived from sources within the District within the meaning of Title 10 of the Act, and shall be determin…

120 COMMON TRUST FUNDS 120.1 A common trust fund (as defined by Pub. L. 81-416) shall not be subject to income taxes imposed by the Act, as amended, and for purposes of the Act shall not be deemed to be a corporation. 120.2 While a common trust fund, as such, is not taxable for i…

121 FRANCHISE TAX 121.1 As defined in Title 1 of the Act, the words "trade or business" include the engaging in or carrying on of any trade, business, profession, vocation, vocation, calling, or commercial activity in the District, except as otherwise provided in this chapter. 12…

122 ALLOCATION AND APPORTIONMENT 122.1 The measure of the franchise tax shall be that portion of the net income of the corporation, financial institution, or unincorporated business that is fairly attributable to any trade or business engaged in or carried on within the District,…

123 DEDUCTIONS WHEN INCOME IS APPORTIONABLE OR EXEMPT 123.1 No deductions shall be allowed for expenses applicable to any income not subject to or exempt from taxation under the Act. 123.2 Where part of any income is apportioned to the District, the deductions applicable to that …

124 ALLOCATION OF NON-BUSINESS INCOME 124.1 Net rents and royalties from real property located in the District shall be allocable to the District. 124.2 Net rents and royalties from tangible personal property shall be allocable to the District, as follows: (a) To the extent that …

125 APPORTIONMENT OF BUSINESS INCOME 125.1 All business income shall be apportioned to the District by multiplying the income by a fraction, the numerator of which is the property factor, plus the payroll factor, plus the sales factor, and the denominator of which is three (3), r…

126 PROPERTY FACTOR 126.1 The property factor is a fraction, the numerator of which is the average value of the taxpayer's real and tangible personal property owned by or rented to the taxpayer and used by the taxpayer in the District during the taxable year; and the denominator …

127 PAYROLL FACTOR 127.1 The payroll factor is a fraction, the numerator of which is the total compensation paid or accrued by the taxpayer in the District during the taxable year, and the denominator or which is the total compensation paid or accrued by the taxpayer everywhere d…

128 SALES FACTOR 128.1 The sales factor, except for transportation companies, is a fraction, the numerator of which is the total sales of the taxpayer in the District during the taxable year; and the denominator of which is the total sales of the taxpayer everywhere during the ta…

129 ALLOCATION AND APPORTIONMENT APPLICABLE TO FINANCIAL INSTITUTIONS 129.1 The District shall impose on a financial institution a franchise tax measured by net income, determined by multiplying the financial institution's base by an apportionment fraction, the numerator of which…

130 WITHHOLDING: GENERAL PROVISIONS 130.1 Each employer [as defined in § 3401(d) of the U.S. Internal Revenue Code of 1986 as amended (hereafter “IRC of 1986”)] making payment of wages subject to withholding, shall deduct, withhold, and pay over to the Deputy Chief Financial Offi…

131 WITHHOLDING PAYROLL RECORDS 131.1 Each employer shall maintain written records which accurately and completely show the following for each employee: (a) The sums required to be withheld from each employee; and (b) The sums actually withheld by the employer from each employee.…

132 RETURNS OF TAXES WITHHELD 132.1 Return Filing Period. Returns of tax withheld from wages are required to be filed with the Office of Tax and Revenue on a quarterly or annual basis. Entities reporting non-wage tax withheld shall file a return on an annual basis. 132.2 The DCFO…

133 PAYMENT OF WITHHOLDING TAX 133.1 All sums which the employer has withheld from employees shall be deemed to be held in trust by the employer for the District. 133.2 Taxes withheld from wages are required to be paid to the Office of Tax and Revenue on a monthly, quarterly, or …

134 ADJUSTMENT OR REFUND OF WITHHOLDING TAX DEDUCTED 134.1 If, in any filing period, more than the correct amount of tax is deducted from any wage payment, the over-collection shall be repaid to the employee(s) only in another filing period of the same calendar year. 134.2 The em…

135 ANNUAL REPORT OF WITHHOLDING 135.1 Duplicate copies of all statements (Forms W-2, 1098, 1099 or K-1), as appropriate, or approved substitute withholding statements shall be sent to the District by each employer with the Form WT (Withholding Transmittal) that is due on the las…

136 METHODS OF WITHHOLDING TAX 136.1 The tax shall be computed in accordance with one (1) of the methods set forth in this section on the wages paid within each period to any employee. 136.2 METHOD A - BASED ON A PERCENTAGE OF WAGES PAID: Each employer electing to use this method…

137 PAYROLL PERIODS: REGULAR AND IRREGULAR 137.1 For the purposes of this chapter, the term "payroll period" means the period for which a payment of wages is ordinarily made to the employee by an employer. 137.2 It is immaterial that the wages are not always paid at regular inter…

138 ADDITIONAL WITHHOLDING 138.1 Amounts, in addition to taxes required to be withheld, may be withheld by an employer under an agreement between the employer and employee. 138.2 Additional amounts withheld pursuant to an employer-employee agreement, together with the amounts oth…

139 SUPPLEMENTAL WAGE PAYMENTS 139.1 If supplemental wages (such as bonuses, commissions, or overtime pay) are paid at the same time as regular wages, the tax to be withheld shall be determined as if the aggregate of the supplemental and regular wages were a single wage payment f…

140 WAGES PAID ON BEHALF OF TWO OR MORE EMPLOYERS 140.1 If a payment of wages is made to an employee by an employer through an agent, fiduciary (or other person who also has the control, receipt, custody, or disposal of, or pays the wages payable by another employer to the employ…

141 EMPLOYEE WITHHOLDING EXEMPTIONS 141.1 Each withholding exemption shall equal seven hundred fifty dollars ($ 750). 141.2 An employee shall be entitled to the following number of withholding exemptions (except as limited by § 141.3): (a) One (1) withholding exemption for the em…

142 WITHHOLDING EXEMPTION CERTIFICATES 142.1 Each employee shall be required to file with his or her employer a withholding exemption certificate on Form D-4 on or before the date of commencement of employment. 142.2 Blank copies of Withholding Exemption Certificates (Form D-4) s…

143 WITHHOLDING STATEMENTS (FORM D-2) 143.1 On or before January 31st of each year, each employer shall furnish to each employee from whose wages tax has been withheld the original and one (1) legible copy of the Withholding Statement (Form D-2). 143.2 The original copy of the wi…

144 ESTIMATED TAX: GENERAL PROVISIONS 144.1 A declaration of estimated tax shall be made by each individual residing or domiciled in the District when gross income not subject to District withholding tax shall result in a tax liability of more than one hundred dollars ($ 100.00) …

145 DECLARATION OF ESTIMATED INDIVIDUAL INCOME TAX 145.1 The declaration of estimated tax shall be on Form D-40ES. The form may be obtained from the Deputy Chief Financial Officer. The form shall be executed and filed in accordance with the instructions on the form. 145.2 For the…

146 JOINT DECLARATIONS OF ESTIMATED TAX 146.1 A joint declaration may be made by husband and wife, in which case liability with respect to estimated tax shall be joint and several. 146.2 No joint declaration may be made if the husband and wife are separated under a decree of divo…

147 FILING ESTIMATED TAX DECLARATIONS AND PAYMENT OF TAX 147.1 The Act requires that the first payment of tax shall always accompany the filing of the declaration first filed by the taxpayer. 147.2 If the taxpayer first meets the requirement for filing a declaration after Septemb…

148 USE OF TAX RETURN AS A DECLARATION OF ESTIMATED TAX 148.1 If a taxpayer files a District income tax return for a calendar year on or before January 15th of the succeeding calendar year (or if the taxpayer is on a fiscal year basis, on or before the 15th day of the first month…

149 DECLARATION AND PAYMENT OF ESTIMATED FRANCHISE TAX 149.1 Each corporation, financial institution, and unincorporated business required to make and file a franchise tax return under this article shall make and file a declaration of estimated tax if its franchise tax imposed by…

150 OVERPAYMENT OF TAX AND REFUND SET-OFFS 150.1 If it is determined by the Deputy Chief Financial Officer that there has been an overpayment of any tax (whether as deficiency or otherwise), interest shall be allowed and paid upon that overpayment of tax at the rate of six per ce…

151 PENALTIES FOR FAILURE TO FILE RETURNS OR PAY TAXES 151.1 If any person fails to make and file a return within the time prescribed by law, (except in the case of an employer filing quarterly returns), unless it is shown that the failure is due to reasonable cause and not due t…

152 TRADE, BUSINESS, AND PROFESSIONAL LICENSES 152.1 Each person (except a registered or practical nurse, a corporation, or an unincorporated business) who has been exempted from the unincorporated business tax either because that person's trade or business cannot by law, custom,…

153 MODIFICATIONS TO INCOME AND DEDUCTIONS 153.1 Income from annuities and pensions may be modified, and the income may be deducted to arrive at the District adjusted gross income under the following circumstances: (a) If, under the provisions of § 72(d)(1) of the Internal Revenu…