DC estate tax: the 2026 exclusion, rates and a Georgetown example

At a glance

Does DC have an estate tax?

Yes, and it reaches far more estates than the federal one. For deaths in 2026, DC taxes estates above $4,988,400. The federal exclusion for 2026 is $15,000,000, three times higher. A DC resident who owns a $4 million Georgetown house and $2 million in other assets owes $121,299 to DC and nothing to the IRS.

The DC line is also less forgiving for married owners. Federal law lets a surviving spouse use the unused part of the first spouse's exclusion. DC law has no provision for transferring a spouse's unused exclusion, so each spouse's $4,988,400 has to be planned for separately. If your house and savings together are near $5 million, this is the tax to plan around.

Are you over the DC estate tax line?

The 2026 exclusion: $4,988,400

The statute calls it the zero bracket amount. It applies to deaths from January 1 to December 31, 2026, and it rises each year with a cost-of-living adjustment. If the gross estate is at or below it, no DC return is required.

How the line has moved

The threshold jumped in 2018, then cut it from $5,762,400 to $4,000,000 in 2021. Even after five years of indexing, the 2026 figure is still below the 2020 one.

Count the house at market value

The estate is valued at what things are worth, so use what the house would sell for, not its tax assessment. OTR asks for certified appraisals with the return. The Georgetown market page shows where values sit. Add retirement accounts, brokerage accounts and any other property, and the $4,988,400 line comes quickly.

How much is DC estate tax?

DC's rates climb from 11.2% to 16% on the part of the taxable estate above the exclusion. Reading DC Code § 47-3702, the tax falls only on the excess, so there's no cliff where crossing the line by a dollar taxes the whole estate. The first dollar over is taxed at 11.2%, though, so the bill builds fast.

A $6 million estate, step by step

Take a DC resident who dies in 2026 with a $4 million Georgetown house and $2 million in other assets.

1. Subtract the exclusion. $6,000,000 minus $4,988,400 leaves $1,011,600 taxable by DC.
2. Tax the first slice at 11.2%. The $11,600 up to $5,000,000 costs $1,299.20.
3. Tax the next slice at 12%. The $1,000,000 from $5,000,000 to $6,000,000 costs $120,000.

The DC bill is $121,299.20. Federal tax is zero. Redo the three steps with your own total to see where you land.

Computed from DC Code § 47-3702 and the IRS 2026 exclusion. Real returns start from the federal taxable estate after deductions.

What changes for married couples and partners?

No DC portability

Under federal law a surviving spouse can elect, on a timely filed return, to use the deceased spouse's unused exclusion. DC uses a fixed exclusion per person, and its estate tax chapter contains no provision for passing the unused part to a spouse. Maryland does have one. In practice, a married couple whose combined estate is near $10 million can't rely on the survivor inheriting two DC exclusions. Ask an estate attorney about planning that uses each spouse's DC exclusion at the first death, such as a credit-shelter trust.

Domestic partners

For the DC return, the taxable estate is computed as if federal law treated a domestic partner like a spouse, so the marital treatment that applies to spouses carries over to domestic partners for the DC return.

Owning a Georgetown house from Maryland or Virginia

The house is taxed where it sits

Real property has its taxable situs where it's located. A Georgetown house sits in DC's estate tax base even if you live elsewhere. A separate section taxes nonresidents on DC property; because that section wasn't reviewed for this page, a nonresident owner should ask an estate attorney how it applies. Moving to Bethesda doesn't take a DC house out of DC estate tax.

DC residents with property elsewhere

The rule runs the other way too. For a DC resident, DC reduces the tax by the share of real and tangible property located outside the District, such as a house in Virginia.

Maryland: lower at the line, higher above it

Maryland's exclusion is $5,000,000 plus any unused exclusion from a deceased spouse, and its tax is capped at 16% of the estate above $5 million. At a $5 million estate a Maryland resident owes about nothing while a DC resident owes $1,299. At $6 million, the simplified Maryland figure is about $160,000 against DC's $121,299; at $8 million, about $480,000 against $385,299. Maryland also charges a 10% inheritance tax on property passing to some heirs. If you're weighing where to live, the DC, Maryland or Virginia relocation guide puts this beside income and property tax.

What assets are excluded from DC estate tax?

There's no separate DC list. Its return is built on the federal one: OTR requires a full federal Form 706 with the DC return, so what the federal return deducts generally flows into the DC figure. Two DC rules then change the result.

Property outside the District

For a DC resident, real and tangible property located outside DC reduces the DC tax in proportion to its share of the estate. A second house in Virginia or on the Eastern Shore is the common case.

Estates under the line

An estate whose gross value doesn't exceed $4,988,400 for a 2026 death files no DC return at all. Everything above that depends on the federal taxable estate, which is why your attorney will start from the 706.

Estate tax is one of four DC taxes a Georgetown owner meets; the others are covered on the DC income tax rates page and the property and transfer tax pages.

When is the DC estate tax return due?

Ten months after death

The return, Form D-76 or D-76EZ, and the tax are due within 10 months of death. It's filed electronically through MyTax.DC.gov.

Extensions and penalties

A six-month extension to file is available on DC Form FR-77; the federal extension form isn't accepted. Late payment draws interest at 10% a year compounded daily, and the late penalty is 5% a month up to 25%. The return needs the will, a full federal Form 706 and certified appraisals, so an executor should start on the appraisal early.

Mistakes Georgetown owners make with DC estate tax

Planning only for the federal number

A $15 million federal exclusion makes estate tax look irrelevant. At DC's $4,988,400 it isn't.

Using the assessment instead of market value

The assessment is a tax figure. The estate return uses appraised market value, and the two can differ by a wide margin. The DC property tax page explains how assessments are set.

Confirm with a DC estate attorney

This page explains how DC estate tax works from the DC Code, OTR and the IRS. It isn't legal or tax advice. Two points here are readings of the statute rather than OTR statements: that DC taxes only the amount above the exclusion, and that DC has no portability. Confirm both, and anything about a nonresident owner, with a DC estate attorney or CPA before you plan around them. If an estate sale is part of the plan, the Georgetown seller's guide covers what selling a house in an estate involves.

Common questions

Sources

• OTR: Notice of Oct. 1, 2025 Tax Changes
• OTR: DC Estate, Inheritance and Fiduciary Tax Information
• DC Code § 47-3701 (estate tax definitions)
• DC Code § 47-3702 (estate tax on residents)
• IRS: What's new, estate and gift tax
• Maryland Code, Tax-General § 7-309 (estate tax)
• Maryland Code, Tax-General § 7-204 (inheritance tax rate)