DC Tax Changes 2026: D-40 and Federal Decoupling | HelloBooks DC does not recognize the federal Schedule 1-A deductions or the higher federal standard deduction, sets its own amounts, and matches 100% of EITC.
The District set its own standard deduction for 2025 and does not allow any of the new federal Schedule 1-A deductions. Expect D-40 results to differ from the federal return.
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DC standard deduction (single)
$15,000
Applies: Tax year 2025From IRS.gov · checked October 10, 2026
The D-40 booklet says the District will not recognize the higher federal basic standard deduction, the deductions for tips, overtime or car loan interest, or the larger senior deduction. A client who claimed any Schedule 1-A deduction federally cannot carry it to the D-40.
The return is due April 15, 2026.
The FAS 109 deduction for some combined reporting filers is deferred to tax years beginning after December 31, 2029.
The plain-English summary for business owners
Comparison · Schedule 1-A at the state level
Reference · 2025 and 2026
New form · tax year 2025 onward
General information for tax professionals, not advice on a specific return. Figures are from IRS.gov on the date shown; check the current IRS instructions before filing.
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