October 18, 2021
2021-1894 District of Columbia law would increase income tax on high-wage earners starting in 2022 District of Columbia Muriel Bowser has approved the Fiscal Year 2022 Budget Act (B24-0285) which would increase income tax on those with annual earnings in excess of $250,000 and raise the top income tax rate from 8.75% to 10.75% for earnings in excess of $1 million. The District of Columbia does not allow for a supplemental rate of withholding. Revenue from the tax hike would be used to fund a wage increase for early childhood educators, expand assistance for the homeless and fund an increase in the District of Columbia earned income tax credit. The legislation must be approved by the US Congress. The proposed and current rate tables are shown below. Income tax rates effective January 1, 2022 (if approved by the US Congress) Not over $10,000 | 4% of the taxable income | Over $10,000 but not over $40,000 | $400, plus 6% of the excess over $10,000 | Over $40,000 but not over $60,000 | $2,200, plus 6.5% of the excess over $40,000 | Over $60,000 but not over $250,000 | $3,500, plus 8.5% of the excess over $60,000 | Over $250,000 but not over $500,000 | $19,650, plus 9.25% of the excess over $250,000 | Over $500,000 but not over $1,000,000 | $42,775, plus 9.75% of the excess over $500,000 | Over $1,000,000 | $91,525, plus 10.75% of the excess over $1,000,000 |
Income tax rates effective January 1, 2018 Not over $10,000 | 4% of the taxable income | Over $10,000 but not over $40,000 | $400, plus 6% of the excess over $10,000 | Over $40,000 but not over $60,000 | $2,200, plus 6.5% of the excess over $40,000 | Over $60,000 but not over $350,000 | $3,500, plus 8.5% of the excess over $60,000 | Over $350,000 but not over $1,000,000 | $28,150, plus 8.75% of the excess over $350,000 | Over $1,000,000 | $85,025, plus 8.95% of the excess over $1,000,000 |
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