The District of Columbia Office of Tax and Revenue (OTR) reminds taxpayers and tax professionals that a number of changes will take effect for the 2019 tax filing season.
Following are highlights of several of the changes:
- Tax Refunds: The Office of Tax and Revenue’s enhanced security measures to safeguard tax dollars and combat identify theft/tax refund fraud may result in longer processing times for some tax returns and associated refunds. The processing window for selected tax returns is approximately 25 business days.
- Individual Income tax filing deadline: The deadline to file income tax returns for tax year 2018 is Monday, April 15, 2019.
- Standard Deduction: Beginning with tax year 2018, the District standard deduction conforms to the federal standard deduction and includes both a basic standard deduction and, if applicable, additional standard deductions for taxpayers and spouses or registered domestic partners who are blind and/or age 65 and older in the amount of $1,300 ($1,600 if single or head of household). Pursuant to the federal tax reform that was passed by Congress in 2017, the basic standard deduction for tax year 2018 is as follows:
- Single: $12,000
- Head of Household: $18,000
- Married/Registered Domestic Partners Filing Jointly: $24,000
- Married/Registered Domestic Partners Filing Separately: $12,000
- Dependents: See D-40 Worksheet for Dependent Filers
- Personal Exemptions: Beginning with tax year 2018, the District personal exemption conforms to the federal personal exemption. Beginning with tax year 2018, the amount of both the federal and District personal exemption is zero. (The District personal exemption for fiduciaries is zero for estates and $100 for trusts.)
- Low Income Tax Credit: The District low income tax credit was repealed for tax years beginning with 2018.
- Itemized Deductions: The District generally allows the same itemized deductions allowed under the Internal Revenue Code for federal individual or fiduciary income tax returns. Pursuant to the federal tax reform that was passed by Congress in 2017, many itemized deductions previously allowed under the Internal Revenue Code have been eliminated or modified beginning with tax year 2018. Accordingly, many of the itemized deductions previously allowed for District taxpayers are now eliminated or modified.
- State and Local Tax Deduction: Pursuant to the federal tax reform that was passed by Congress in 2017, the itemized deduction allowed under federal law for the payment of state and local taxes is limited to $10,000 per year for single and married filing jointly taxpayers and $5,000 per year for married filing separately taxpayers. The District does not allow a deduction for income taxes but allows a deduction for property taxes. The District will continue to allow a deduction for property taxes paid and will not limit that deduction to $10,000. For more information, see Calculations D (pg. 26) and F (pg. 28).
- Schedule H: The Homeowner and Renter Property Tax Credit amounts for tax year 2018 are:
- Property tax credit remains $1,025
- Schedule H federal AGI eligibility threshold for under age 70 increases from $50,500 to $51,000
- Schedule H federal AGI eligibility threshold for age 70 and older increases from $61,900 to $62,600
- Early Learning Tax Credit: For tax year 2018 only, eligible taxpayers may claim a refundable income tax credit up to $1,000 per eligible child. For more information on the Early Learning Tax Credit (ELTC), please visit https://otr.cfo.dc.gov/page/early-learning-tax-credit-frequently-asked-questions-faqs.
- Franchise Tax Rate: The tax rate for corporations and unincorporated businesses for tax year 2018 is 8.25 percent.
- Small Retailer Property Tax Relief Credit: Certain qualified corporations and unincorporated businesses engaged in making sales at retail may claim a refundable franchise tax credit up to $5,000 based on the amount of real property taxes or rent they pay for a qualified retail location in the District. For more information on the Small Retailer Property Tax Relief Credit, please visit https://otr.cfo.dc.gov/page/small-retailer-property-tax-relief-credit-frequently-asked-questions-faqs.
The Office of Tax and Revenue will open the District of Columbia’s 2019 filing season on January 28, 2019. Stay tuned for more details and information as it pertains to the tax filing season.