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DC Residents–Here's What You Need to Know as You Prepare for the 2018 Tax Filing Season

Friday, January 26, 2018

The Office of Tax and Revenue (OTR) reminds taxpayers and tax professionals that a number of changes will take effect for the 2018 tax filing season.

Following are highlights of several of the changes:

Individual Income tax filing deadline: The deadline to file individual income tax returns is Tuesday, April 17, 2018. April 15 falls on a Sunday and OTR will be closed on Monday, April 16 in observance of Emancipation Day.

Standard Deduction Increased: The standard deduction has increased for tax year 2017 as follows:

  • From $5,200 to $5,650 for single filers,
  • From $6,500 to $7,800 for head of household filers, and
  • From $8,350 to $10,275 for married filers.

Schedule H: The Homeowner and Renter Property Tax Credit amounts for tax year 2017 are:

  • Property tax credit increases from $1,000 to $1,025
  • Schedule H federal AGI eligibility threshold for under age 70 increases from $50,000 to $50,500
  • Schedule H federal AGI eligibility threshold for age 70 and older increases from $60,000 to $61,900

DC Earned Income Tax Credit (EITC) for Childless Workers: The formula for determining the DC EITC for childless workers has changed. A DC EITC Worksheet for Filers Without A Qualifying Child is included in the Individual Income Tax Forms and Instructions Booklet.

Pre-Acquisition Disclosures: The Consumer Financial Protection Board (CFPB) has published its final Prepaid Account Rule, creating detailed consumer protections for prepaid accounts. For tax year 2017, if taxpayers elect to receive a refund using the U.S. Bank ReliaCard™ or use a pre-paid card to make payments, they are required to review and acknowledge the Pre-Acquisition Disclosures (Short and Long Forms) prior to selecting the ReliaCard option as method for receiving a refund or using a pre-paid card when making a payment.

New Prepaid Debit Card: US Bank ReliaCard™ is a prepaid debit card issued by the US Bank. This replaces the DC Tax Refund Visa® Prepaid Card.

Food Commodity Donations Tax Credit Limitation: The non-refundable tax credit for farm to food donations was repealed effective April 7, 2017. Taxpayers (individuals and businesses) may only claim this credit for donations made between January 1, 2017 and April 7, 2017.

Franchise Tax Rate: The tax rate for unincorporated and incorporated businesses for tax year 2017 is 9.0 percent.

New Business Registration Policy: OTR will no longer automatically register businesses for Corporate or Unincorporated Franchise Tax from the D-20 or D-30 tax returns. All new entities starting business operations or promoting/vending at special events in DC MUST register at MyTax.DC.gov using the new business registration process by completing the FR-500 for business income (Corporate or Unincorporated Franchise, Sales and Use, Withholding Wage, Withholding Non-Wage), or FR-500B for Special Event Promoters and/or Vendors. The FR-500 requires all entities to provide information for responsible officers, including social security numbers (SSN’s), and will not be processed without this information.

Tax Fraud Protection: OTR’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 could be up to 25 days.

As previously announced, OTR will open the District of Columbia’s 2018 tax filing season on Monday, January 29. Stay tuned for more details and information as it pertains to the tax filing season.