DC Code § 47-1806.06 (2021)
2021 District of Columbia Code|Title 47 - Taxation, Licensing, Permits, Assessments, and Fees. [Enacted title]|Chapter 18 - Income and Franchise Taxes|Subchapter VI - Tax on Residents and Nonresidents|§ 47-1806.06. Tax on residents and nonresidents — Credits — Property taxes

(a)(1) For purposes of providing relief to certain District of Columbia residents who own their principal place of residence and who reside in the same, an income tax credit shall be allowed to the eligible claimant equal to the amount by which all or a portion of real property taxes the taxpayer pays on his or her principal place of residence for the taxable year exceeds a percentage (as determined under paragraph (2) of this subsection) of his or her household gross income for that year. District of Columbia residents who rent their principal place of residence, who reside in the same and who are eligible claimants under the provisions of this section, shall be allowed an income tax credit equal to the amount by which rent paid constituting property taxes, deemed for the purposes of this subsection to be 20% of rent, on his or her principal place of residence for the taxable year, exceeds a percentage (as determined under paragraph (2) of this subsection) of his or her household gross income for that year and which exceeds the amount of any rental supplement payments, received by the claimant pursuant to the provisions of title III of the Rental Housing Act of 1977, during that year. The credit shall not exceed the maximum credit amount. (2)(A) For taxable years beginning after December 31, 1977, the percentage required under paragraph (1) of this subsection to be determined for claimants other than elderly, blind, or claimants with disabilities shall be the percentage specified in the following table:  If household income is: Tax credit equals: $0 — $2,999 95% of property tax* exceeding 1.5% of household gross income $3,000 — $4,999 75% of property tax* exceeding 2.0% of household gross income $5,000 — $6,999 75% of property tax* exceeding 2.5% of household gross income $7,000 — $9,999 75% of property tax* exceeding 3.0% of household gross income $10,000 — $14,999 75% of property tax* exceeding 3.5% of household gross income $15,000 — $20,000 75% of property tax* exceeding 4.0% of household gross income *or rent paid constituting property tax (15% of rent) (B) For taxable years beginning after December 31, 2013, the percentage required under paragraph (1) of this subsection to be determined for all claimants shall be the percentage specified in the following table:  If adjusted gross income is:Tax credit equals:$0 — $24,999100% of property tax* exceeding 3.0% of adjusted gross income of the tax filing unit$25,000 — $40,000100% of property tax* exceeding 4.0% of adjusted gross income of the tax filing unit*or rent paid constituting property tax (20% of rent) (C) For taxable years beginning after December 31, 2015, the percentage required under paragraph (1) of this subsection to be determined for all claimants other than eligible senior claimants shall be the percentage specified in the following table:  If adjusted gross income is:Tax credit equals:$0 — $24,999100% of property tax* exceeding 3.0% of adjusted gross income of the tax filing unit$25,000 — $50,000100% of property tax* exceeding 4.0% of adjusted gross income of the tax filing unit*or rent paid constituting property tax (20% of rent) (D) For taxable years beginning after December 31, 2018, the percentage required under paragraph (1) of this subsection to be determined for all claimants other than eligible senior claimants shall be the percentage specified in the following table:  If adjusted gross income is:Tax credit equals:$0 — 24,999100% of property tax* exceeding 3.0% of adjusted gross income of the tax filing unit$25,000 — $51,999100% of property tax* exceeding 4.0% of adjusted gross income of the tax filing unit52,000 — $55,000100% of property tax* exceeding 5.0% of adjusted gross income of the tax filing unit*or rent paid constituting property tax (20% of rent)(2A) For taxable years beginning after December 31, 2013, the percentage required under paragraph (1) of this subsection to be determined for eligible senior claimants shall be 100% of property tax or of rent constituting property taxes accrued exceeding 3.0% of adjusted gross income of the tax filing unit. (3) Repealed. (4) All eligible claimants who rent their principal place of residence, who reside in the same and who receive rental supplements under the provisions of title III of the Rental Housing Act of 1977, shall, when computing their income tax credit pursuant to this section, deduct from the amount of said credit the total amount of rental supplements received during the taxable year. The amount of credit which is in excess of any rental supplements received shall constitute the eligible claimant’s total income tax credit under this section. If the amount of rental supplements received exceeds the amount of credit calculated under this section, then the eligible claimant’s credit shall equal zero. (b) For purposes of this section: (1)(A) The term “household gross income” means gains, profits, and income derived from salaries, wages, or compensation for personal services of whatever kind and in whatever form paid, including salaries, wages, and compensation paid by the United States to its officers and employees, or income derived from any trade or business or sales or dealings in property whether real or personal, including capital assets as defined in this chapter growing out of the ownership or sale of or interest in such property; income from rent, royalties, interest, dividends, securities, or transactions of any trade or business carried on for gain or profit, or gains or profits and income derived from any source whatever, including but not limited to cash distributions from a business or investment entity in which the claimant has an interest, alimony, and separate maintenance payments (including amounts received under separate maintenance agreements), strike benefits, cash public assistance and relief (not including relief or credit granted under this section), sick pay, workmen’s compensation, proceeds of life insurance policies, the gross amount of any pension or annuity (including railroad retirement benefits, veterans’ disability pensions, or payment received under the federal Social Security Act), state or District of Columbia unemployment compensation laws, and nontaxable interest received from the United States, a state or any agency or instrumentality thereof. The word “income” does not include gifts from nongovernmental sources, food stamps, or food or other relief in kind supplied by a governmental agency. (B) In determining household gross income the exclusions from gross income as provided by § 47-1803.02(a) shall not apply. (2) The term “household income” shall have the same meaning as the words “adjusted gross income” as defined in subsection (c) [repealed] of § 47-1803.02 [see now § 47-1803.02(b)]. For purposes of determining adjusted gross income within the meaning of this section, gross income shall mean household income as defined in this section. (3) The term “home” means the claimant’s dwelling house, whether owned or rented by the claimant, and so much of the land surrounding it as is reasonably necessary for use of the dwelling as a home, and may include a multi-unit building or a multi-purpose building and a part of the land upon which it is located. (4) The term “claimant” means a person who has filed a claim under this section, was an owner of record of a home in the District, or a lessee, tenant at will, or tenant at sufferance paying rent on a home in the District, during the entire calendar year preceding the year in which he files a claim for relief under this section. Only one claimant per tax filing unit per year shall be entitled to relief under this section. (5) Repealed. (6) Repealed. (7) Repealed. (8)(A) The term “rent paid” is that amount paid by a claimant to a landlord solely for the right of occupancy of a home in the District, including the right to use the personal property located therein. Utility charges may be included in the amount of rent paid if they are included in the amount paid to a landlord in connection with the right to occupancy. The term “rent paid” does not include: (i) Rental supplements obtained under the provisions of title III of the Rental Housing Act of 1977 [D.C. Law 2-54]; (ii) Advance rental payments for another period; (iii) Rental deposits, whether or not expressly set out in the rental agreement; (iv) Any charges for medical services or food provided by the landlord; or (v) Payments made to a landlord for the right of occupancy of property which is exempt from District real property taxes. (B) The term “rent constituting property taxes accrued” means 20% of the rent paid in any calendar year by a claimant solely for the right of occupancy of his home in the calendar year, and which constitutes the basis of a claim in the succeeding calendar year for a credit for property taxes paid. (9) The term “eligible senior claimant” means a claimant who is 70 years or older at any time during the tax year and whose adjusted gross income does not exceed the eligibility income threshold amount. (10) The term "base year" means the calendar year beginning January 1, 2015, or the calendar year beginning one calendar year before the calendar year in which the new dollar amount of a maximum credit amount or eligibility income threshold amount shall become effective, whichever is later. (11) The term "Consumer Price Index" means, for any calendar year, the average of the Consumer Price Index for All Urban Consumers for the Washington-Arlington-Alexandria, DC-MD-VA-WV Metropolitan Statistical Area (or such successor metropolitan statistical area that includes the District), or any successor index, as of the close of the 12-month period ending on July 31 of such calendar year. (12) The term "cost-of-living adjustment" means, for any calendar year, the difference between the Consumer Price Index for the preceding calendar year and the Consumer Price Index for the base year, divided by the Consumer Price Index for the base year. (13) The term "eligibility income threshold amount" means: (A) For the taxable year beginning January 1, 2015, $60,000 for eligible senior claimants and $40,000 for all other claimants; (B) For the taxable year beginning January 1, 2016, $60,000 for eligible senior claimants and $40,000 for all other claimants, increased annually pursuant to the cost-of-living adjustment (if the adjustment does not result in a multiple of $100, rounded down to the next multiple of $100); and (C) For the taxable year beginning January 1, 2019, $75,000 for eligible senior claimants and $55,000 for all other claimants, increased annually pursuant to the cost-of-living adjustment (if the adjustment does not result in a multiple of $100, rounded down to the next multiple of $100). (14) The term "maximum credit amount" means: (A) For the taxable year beginning January 1, 2015, $1,000; (B) For the taxable year beginning January 1, 2016, $1,000, increased annually pursuant to the cost-of-living adjustment (if the adjustment does not result in a multiple of $25, rounded down to the next multiple of $25); and (C) For the taxable year beginning January 1, 2019, $1,200, increased annually pursuant to the cost-of-living adjustment (if the adjustment does not result in a multiple of $25, rounded down to the next multiple of $25). (c) In the event that any installment of rent for a calendar year for which a claim is filed is paid prior to the beginning of or subsequent to the end of such calendar year, it shall be included as rent for the year for which the claim was made and for no other year, and shall not be included as rent for purposes of this section for the year in which the installment was paid. (d) If the Mayor determines that the rent paid was not the result of an agreement entered into at arm’s length between the tenant and his landlord, the Mayor may adjust the rent to a reasonable amount for the purposes of this section. (e)(1) Beginning with calendar year 1977, and for each succeeding calendar year, if a claimant owns and occupies his or her home in the District on December 31st of any such year, “property taxes accrued” means real property taxes (exclusive of special assessments, interest on a delinquency in payment of tax, and penalties and services charges) as reflected on the District real estate tax bill ordinarily sent out in September of such year; provided, however, that any amount of real property tax deferred under the provisions of §§ 47-845, 47-845.02 and 47-845.03 shall be considered as “property taxes accrued” for the purpose of determining the credit allowable under this section. If a home is an integral part of a larger unit such as a multi-purpose building or a multi-dwelling building, property taxes accrued shall be that percentage of the total property taxes accrued as the value of the home bears to the total value of the property. (2) When a claimant owns or rents 2 or more different homes in the District in the same calendar year, “property taxes accrued” or “rent constituting property taxes accrued” shall be based on the claimant’s status as an owner or renter on December 31st of such calendar year. (3) When a claimant rents 2 or more different homes in the District in the same calendar year, rent paid by the claimant during that year shall be determined by dividing the rent paid pursuant to the last rental agreement in force during that calendar year by the number of months during that calendar year for which this rent was paid and by multiplying the result by 12. (f) The right to file under this section shall be personal to the claimant, but such right may be exercised by his legal guardian or attorney-in-fact. The right to file a claim shall not survive the death of a claimant. If a claimant dies after having filed a claim, any amount refunded as a result thereof shall be disbursed to his estate; provided, that if no executor or administrator qualifies therein within 2 years of the filing of the claim, or no petition for distribution of a small estate is filed pursuant to §§ 20-2101 and 20-2102, the claim shall not be allowed. (g) Subject to the limitations provided in this section, commencing with the taxable year beginning after December 31, 1974, and for succeeding taxable years, the claimant may claim as a credit against the District income taxes otherwise due on his income, property taxes accrued or rent constituting property taxes accrued for that year. If the allowable amount of such claim exceeds the income taxes otherwise due from the claimant, or other tax liabilities of the claimant to the District, or if there are no District income taxes due from the claimant, the amount of the claim not used as an offset against income taxes or other tax liabilities of the claimant to the District shall be paid or credited to the claimant. No interest shall be allowed on any payment made to a claimant pursuant to this section. (h) No claim with respect to property taxes accrued or with respect to rent constituting property taxes accrued shall be allowed unless a District of Columbia individual income tax return or (if the claimant is not required to file such return) a claim for credit under this section is filed with the District on the forms and in such manner and with such information as the Mayor may prescribe. Any claim for credit shall be filed with the District on or before the expiration of the 3-year statute of limitations. The statute of limitations shall commence to run on April 15th of the year following the year for which the claim is made. (i) The amount of any claim otherwise payable under this section may be applied by the District against any outstanding tax liability of the claimant to the District. (j)(1) In determining eligibility for the credit allowable under this section, and for the purpose of determining outstanding tax liability (if any) of the claimant to the District household income for which the claim is filed and the claimant’s outstanding tax liability (if any) shall be determined on the basis of the adjusted gross income of the tax filing unit, which is defined as an individual or married couple that would—were their income above the filing threshold—file an individual income tax return. (2) In the case of spouses or domestic partners who, during the entire calendar year for which a claim is filed under this section, maintain separate homes, for the purpose of determining household income and the claimant’s outstanding tax liability (if any), such spouses or domestic partners shall be deemed to have been unmarried during the calendar year for which the claim is made. (k) No credit shall be allowed under this subchapter for any year during which the person claiming the credit was a dependent, under any state, federal, or District law levying a tax on income, unless during that year such person is or becomes 65 years of age or older. (l) A claimant whose claim is based on the amount of rent paid shall substantiate the rent paid upon a request by the Mayor. (m)(1) If, on an audit of any claim filed under this section, the Mayor finds the amount to have been incorrectly computed, he shall determine the correct amount and notify the claimant in accordance with the procedures set forth in § 47-1812.05. (2) If it is determined that a claim was filed with fraudulent intent, it shall be disallowed in full. If the claim has been paid or a credit has been allowed against income taxes otherwise payable, the credit shall be canceled and the amount paid shall be assessed against the claimant and recovered in the same manner as provided for the collection of taxes under § 47-412 [repealed]. (n) No claim for relief under this section shall be allowed to any person who was not living in a home which was subject to District of Columbia real property taxation during the calendar year for which the claim is filed. (o) The Mayor is authorized to provide a table which will approximate, as closely as feasible, the amount of relief allowable under this section. (p) If it is determined by the District that a claimant received title to his home in the District or became legally obligated to pay rent for his home in the District primarily for the purpose of receiving benefits under the provisions of this section, his claim shall be disallowed. (q) The Council of the District of Columbia is empowered to make such changes in the amount of annual relief provided under subsection (a) of this section as it may deem proper. (r) [Repealed]. (s) A claimant who is not required to file a return pursuant to § 47-1805.02 may file an alternative form prescribed by the Chief Financial Officer to claim the credit under this section. Notwithstanding § 47-1805.01(a), for taxable years beginning after December 31, 2019, claimants filing an alternative form may file it electronically in a manner prescribed by the Chief Financial Officer.  (July 16, 1947, 61 Stat. 345, ch. 258, art. I, title VI, § 8; Sept. 3, 1974, 88 Stat. 1060, Pub. L. 93-407, title IV, § 451; Jan. 3, 1975, 88 Stat. 2176, Pub. L. 93-635, § 7(a)(1), (b)(1), (c)-(e); Apr. 19, 1977, D.C. Law 1-124, title IV, § 401(d)(2), 23 DCR 8749; Feb. 28, 1978, D.C. Law 2-45, § 4, 24 DCR 3614; Mar. 3, 1979, D.C. Law 2-130, § 6, 25 DCR 2517; Nov. 20, 1979, D.C. Law 3-37, § 5, 26 DCR 1564; June 11, 1982, D.C. Law 4-118, § 112, 29 DCR 1770; July 24, 1982, D.C. Law 4-131, § 108(c), (d), 29 DCR 2418; Apr. 30, 1988, D.C. Law 7-104, § 39(d), (e), 35 DCR 147; enacted, Apr. 9, 1997, D.C. Law 11-254, § 2, 44 DCR 1575; Apr. 24, 2007, D.C. Law 16-305, § 73(e), 53 DCR 6198; Sept. 12, 2008, D.C. Law 17-231, § 41(i), 55 DCR 6758; Apr. 27, 2013, D.C. Law 19-283, § 2, 60 DCR 2307; Feb. 26, 2015, D.C. Law 20-155, § 7052(b), 61 DCR 9990; Oct. 22, 2015, D.C. Law 21-36, § 7042, 62 DCR 10905; Oct. 8, 2016, D.C. Law 21-160, § 7102, 63 DCR 10775; Sept. 11, 2019, D.C. Law 23-16, § 7012, 66 DCR 8621.)  Prior Codifications 1981 Ed., § 47-1806.6. 1973 Ed., § 47-1567g. Section References This section is referenced in § 42-2851.02, § 47-857.01, and § 47-865. Effect of Amendments D.C. Law 16-305 substituted “claimants with disabilities” for “disabled claimants”, throughout the section. D.C. Law 17-231, in subsec. (b)(5), substituted “spouse or domestic partner” for “spouse”; and, in subsec. (j)(2), substituted “spouses or domestic partners” for “husband and wife”. The 2013 amendment by D.C. Law 19-283, in (a)(1), substituted “20% of rent” for “15% of rent” and substituted “$1,000” for “$750”; added (a)(2)(B) and (C); repealed (a)(3); substituted “Only one claimant per tax filing unit per year shall be entitled to relief under this section” for “Only 1 claimant per home and per household per year shall be entitled to relief under this section” in (b)(4); repealed (b)(5), (6), and (7); substituted “20% of the rent” for “15% of the rent” in (b)(8)(B); rewrote (j)(1); and added (r). The 2015 amendment by D.C. Law 20-155 added “other than eligible senior claimants” in (a)(2)(C); added (a)(2A) and (b)(9); and added “($ 60,000 for eligible senior claimants)” in (r). The 2015 amendment by D.C. Law 21-36 substituted “2013” for “2014” in (a)(2A); and substituted “ Sections 47-845, 47-845.02 and 47-845.03” for “ Section 47-845” in (e)(1). Cross References Real property assessments and taxes, promulgation of rules and regulations, powers of Mayor, see § 47-814. Emergency Legislation  For temporary (90 days) amendment of this section, see § 7012 of Fiscal Year 2020 Budget Support Congressional Review Emergency Act of 2019 (D.C. Act 23-112, Sept. 4, 2019, 66 DCR 11964).   For temporary (90 days) amendment of this section, see § 7012 of Fiscal Year 2020 Budget Support Emergency Act of 2019 (D.C. Act 23-91, July 22, 2019, 66 DCR 8497).  For temporary (90 days) amendment of D.C. Law 19-283, § 3, see § 7020 of the Fiscal Year 2014 Budget Support Emergency Act of 2013 (D.C. Act 20-130, July 30, 2013, 60 DCR 11384, 20 DCSTAT 1827). For temporary (90 days) amendment of D.C. Law 19-283, § 3, see 7020 of the Fiscal Year 2014 Budget Support Congressional Review Emergency Act of 2013 (D.C. Act 20-204, October 17, 2013, 60 DCR 15341, 20 DCSTAT 2311). For temporary (90 days) amendment of this section, see § 7062(b) of the Fiscal Year 2015 Budget Support Emergency Act of 2014 (D.C. Act 20-377, July 14, 2014, 61 DCR 7598, 20 STAT 3696). For temporary (90 days) amendment of this section, see § 7052(b) of the Fiscal Year 2015 Budget Support Congressional Review Emergency Act of 2014 (D.C. Act 20-449, October 10, 2014, 61 DCR 10915, 20 STAT 4188). For temporary (90 days) amendment of this section, as amended by D.C. Law 20-155, § 7052(b), see § 2(m) of the Fiscal Year 2015 Budget Support Clarification Emergency Act of 2014 (D.C. Act 20-461, November 6, 2014, 61 DCR 11784, 20 STAT 4368). For temporary (90 days) amendment of this section, see § 7052(b) of the Fiscal Year 2015 Budget Support Second Congressional Review Emergency Act of 2014 (D.C. Act 20-566, January 9, 2015, 62 DCR 884, 21 STAT 541). For temporary (90 days) amendment of this section, see § 2(m) of the Fiscal Year 2015 Budget Support Clarification Emergency Act of 2014 (D.C. Act 20-587, January 13, 2015, 62 DCR 1294, 21 STAT 758). For temporary (90 days) repeal of D.C. Law 19-142 and repeal of this chapter, see § 7016(j) of the Fiscal Year 2016 Budget Support Emergency Act of 2015 (D.C. Act 21-127, July 27, 2015, 62 DCR 10201). Temporary Legislation For temporary (225 days) amendment of this section, see § 2(r)(4) of the Fiscal Year 2015 Budget Support Clarification Temporary Amendment Act of 2014 (D.C. Law 20-179, March 7, 2015, 62 DCR 424). Short Title Section 7001 of D.C. Law 20-61 provided that Subtitle A of Title VII of the act may be cited as the “Subject to Appropriations Repealers Amendment Act of 2013”. References in Text The definition of “adjusted gross income,” referred to as being contained in subsection (c) of § 47-1803.2 in subsection (b)(2), is now contained in subsection (b) of § 47-1803.02. “The Rental Housing Act of 1977,” referred to in (b)(8)(A)(i), is D.C. Law 2-54, which had been codified as Chapter 34 of title 42, and has been superseded by the Rental Housing Act of 1980, D.C. Law 3-131. See also § 42-3401.03(15). Sections 20-2101 and 20-2102, referred to near the end of subsection (f) of this section, refer to sections contained in Title 20 prior to the title’s revision by D.C. Law 3-72, effective June 24, 1980. Editor's Notes Definitions applicable: The definitions in § 47-803 apply to this section. Applicability of D.C. Law 19-283: Section 3 of D.C. Law 19-283, as amended by D.C. Law 20-61, § 7020, provided that the act shall apply as of January 1, 2014.