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District of Columbia
Summary of the Effects of Major Provisions of
the “Tax Cuts and Jobs Act” on District
Residents and Businesses
February 27, 2018
1
District of Columbia
Tax Changes Under the TCJA
2
The Tax Cuts and Jobs Act (TCJA) is the most significant revision to
the federal tax system since 1986
TCJA makes substantial changes to the Internal Revenue Code that
impact both the federal and District tax liabilities of District taxpayers
• An estimated 83% of District taxpayers will experience a decrease or
experience no change in their combined net federal and District
income taxes
• An estimated 17% of District taxpayers will experience an increase in
their combined net federal and District income taxes
The changes to individual income tax and estate tax are temporary
and will expire after December 31, 2025
The changes to the corporate income tax are permanent
District of Columbia
Major Provisions
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District of Columbia
• Federal Tax Rates
• Standard Deduction
• Personal Exemption
• Child Tax Credit
• State and Local Tax (SALT)
Deduction
• Estate Tax Exclusion
• 20% Qualified Business Income
Deduction
• Immediate Expensing/Interest
Deduction Limitation for
Businesses
4
This presentation will focus on the following changes that
may significantly impact District revenues and/or District
taxpayers:
Major Changes Impacting the District
District of Columbia
Federal Individual and Corporate tax rates
reduced and AMT Adjusted
• Individual income tax rates were reduced for most federal income tax brackets (See
attached appendix)
• Alternative minimum tax (AMT) exemption and phaseout levels were substantially
increased
• Corporate income tax rates were changed from a graduated structure to a flat 21%
Federal Effect:
• Reduces federal tax liability for most individual taxpayers and corporations
• Offsets, at least in part, the limitation of SALT deduction for individuals and
elimination of other deductions
District Effect:
• No impact on District revenues
• No impac