Go to Retiree Tax Map District Of Columbia Add to State Compare List | View List View State Compare List (0) selected | Compare up to 5 The Bottom Line Mixed Tax Picture Although the District exempts Social Security income, a steep 8.5% tax rate hits income over $40,000. But many senior homeowners can get a substantial break on property taxes (which aren’t that high to begin with.) Sales taxes in the Nation’s Capital are modest, too. State Sales Tax The District of Columbia has a 6% sales tax. Income Tax Range Low: 4% (on taxable income up to $10,000)High: 8.95% (on taxable income above $1,000,000)Effective tax rate: 4.62% for single filers, 4.74% for joint filers. Social Security Benefits are not taxed. Exemptions for Other Retirement Income Tier 1 Railroad Retirement benefits are exempt. Property Taxes In District of Columbia, residents pay an average of $603 in taxes per $100,000 of assessed home value.Tax breaks for seniors: Homeowners 65 and older with household adjusted gross income of less than $133,100 for the 2019 calendar year can qualify to reduce their property tax by 50%. Homeowners 65 and older whose adjusted gross income is less than $50,000 may qualify for property tax deferral. Vehicle Taxes Drivers pay an excise tax — when a new vehicle is first registered in the District — that ranges from 6% to 8%, depending on the vehicle’s weight. Inheritance and Estate Taxes The District’s estate tax is an unusual mix: The 2019 exclusion amount for the tax is $5,681,760, which is pretty high when compared to other places in the U.S. But the lowest possible estate tax rate is 12% of the estate's value, which is equal to other locations’ top rate.