The DC estate tax applies to a resident’s estate when the gross value exceeds $4,988,400 for deaths in 2026, with rates running from 11.2% up to 16% on the amount above that exclusion.1Office of Tax and Revenue. Notice of Oct. 1, 2025 Tax Changes That threshold sits far below the federal exemption of $15,000,000 for 2026, so many DC estates owe nothing to the IRS but still owe the District.2Internal Revenue Service. Whats New – Estate and Gift Tax The exclusion adjusts each year for inflation.3D.C. Law Library. District of Columbia Code 47-3701 – Definitions
If the gross estate falls below the exclusion, no return is required and no tax is owed. Above it, the return is mandatory and the tax is due within 10 months of death.
What Counts in the Gross Estate
For a DC resident, the gross estate includes everything the decedent owned at death: real estate, bank accounts, investment portfolios, retirement accounts, life insurance proceeds payable to the estate, vehicles, art, jewelry, and business interests. Location of the asset doesn’t matter. A DC resident who owned a vacation home in another state still counts that property in the DC gross estate, though a credit may reduce the tax if the other state also imposes a death tax.4D.C. Law Library. District of Columbia Code 47-3702 – Tax on Transfer of Taxable Estate of Residents; Amounts; Credit
Each asset is valued at fair market value on the date of death. Real property usually requires a formal appraisal or a recent assessment. For financial accounts, the closing balance on the date of death is the relevant figure. Understating values invites a challenge from the Office of Tax and Revenue; overstating them means paying more tax than necessary.
Non-residents are treated differently. A non-resident’s estate owes DC tax only on property with a taxable situs in the District, mainly real estate and tangible personal property physically located inside DC. The tax is figured by computing what the full estate would owe under the resident schedule, then multiplying by the ratio of DC-situs property to the total gross estate.5D.C. Law Library. District of Columbia Code 47-3703 – Tax on Transfer of Taxable Estate of Nonresidents A Virginia resident who owns a $2 million rental in DC can trigger a filing obligation depending on the size of the full estate.
Rate Brackets for 2026
The District uses a graduated schedule. Everything up to the exclusion is taxed at 0%. Above the exclusion, rates start at 11.2% and rise to a top rate of 16% on amounts over $10 million.4D.C. Law Library. District of Columbia Code 47-3702 – Tax on Transfer of Taxable Estate of Residents; Amounts; Credit The statute lists brackets beginning at $1 million, but because the 2026 exclusion is nearly $5 million, the lowest rate that actually applies is 11.2%.
- $4,988,400 to $5,000,000: 11.2%
- $5,000,001 to $6,000,000: 12%
- $6,000,001 to $7,000,000: 12.8%
- $7,000,001 to $8,000,000: 13.6%
- $8,000,001 to $9,000,000: 14.4%
- $9,000,001 to $10,000,000: 15.2%
- Over $10,000,000: 16%
A worked example. A DC resident dies in 2026 with a $7 million gross estate. The taxable base above the exclusion is roughly $2,011,600. The first $11,600 is taxed at 11.2%, the next $1,000,000 at 12%, and the remaining $1,000,000 at 12.8%. Total DC estate tax comes to about $249,299. That sits on top of any federal estate tax the estate might separately owe.
Married Couples Cannot Port the Exclusion
The federal system lets a surviving spouse claim the deceased spouse’s unused exemption. The District does not. When a DC resident dies, any unused portion of their DC exclusion is permanently lost.3D.C. Law Library. District of Columbia Code 47-3701 – Definitions
The consequence matters for couples with combined assets above the exclusion. If the first spouse to die leaves everything to the survivor through the unlimited marital deduction, the first spouse’s DC exclusion goes unused. When the surviving spouse later dies holding all the assets, only one exclusion shelters the estate. For a couple with $9 million in combined assets, that can be the difference between owing nothing and owing DC tax on roughly $4 million. Credit shelter trusts, sometimes called bypass trusts, are the standard planning response: the first spouse funds a trust up to the DC exclusion, and both exclusions get used. A qualified domestic trust is typically needed when the surviving spouse is not a U.S. citizen.
Filing the Return
The personal representative files electronically through MyTax.DC.gov. The main form is Form D-76, with a simpler D-76EZ available for estates that meet certain criteria.6Office of Tax and Revenue. DC Inheritance and Estate Tax Forms Supporting documents include asset valuations, a copy of the decedent’s will, and, if a federal return was required, pages 1 through 3 and Schedules A through O of IRS Form 706.7Office of Tax and Revenue. 2024 D-76 Estate Tax Instructions
Deadlines, Extensions, and Penalties
The return and payment are due within 10 months of the date of death.8D.C. Law Library. District of Columbia Code 47-3705 – Filing Returns; Payment of Tax Due That is one month longer than the nine-month federal deadline, which can trip up executors working both returns at once.
Form D-77 requests a six-month extension and must be filed before the original deadline.9Office of Tax and Revenue. 2025 D-76 Estate Tax Instructions If the executor has already obtained a federal extension on Form 706, the DC filing deadline automatically extends to 30 days after the federal extension ends, provided a copy of the federal extension is furnished to the Office of Tax and Revenue.8D.C. Law Library. District of Columbia Code 47-3705 – Filing Returns; Payment of Tax Due
An extension to file is not an extension to pay. Unpaid tax accrues interest at 10% per year, compounded daily. A late-filing penalty of 5% per month or partial month applies on top of that, capped at 25% of the unpaid tax.7Office of Tax and Revenue. 2024 D-76 Estate Tax Instructions One exception: when a valid federal extension is in place, the payment deadline follows the extended filing deadline rather than the original 10-month mark. Executors who know tax will be owed but need more time on the paperwork should estimate the liability and pay through MyTax.DC.gov before the deadline, then file for the extension.
DC Has No Separate Inheritance Tax
The estate itself pays the tax before assets are distributed. Beneficiaries who receive property from a DC estate do not owe a separate District tax on what they inherit.10D.C. Law Library. District of Columbia Code – Chapter 37 – Inheritance and Estate Taxes Maryland and some other nearby jurisdictions impose both an estate tax and an inheritance tax, which is why the two sometimes get confused.