Does District of Columbia follow the federal no-tax-on-tips and overtime deductions?
SPLIT (does not conform 2025; conforms 2026–2028)
District of Columbia's position is split — by deduction, by tax year, or both. Read the per-deduction table and the state's own words below carefully before assuming either deduction applies to your state return. The federal deduction on Schedule 1-A is separate and unaffected.
Verified against the official state source below — last verified October 26, 2026
| Deduction | District of Columbia position |
|---|---|
| Federal tips deduction (IRC §224) | Does not conform 2025; conforms 2026–2028 |
| Federal overtime deduction (IRC §225) | Does not conform 2025; conforms 2026–2028 |
What the state itself says
"allowing District taxpayers to take deductions for qualified tips, overtime earnings, personal car loan interest, and an enhanced senior deduction" — and — "These were not authorized deductions in tax year 2025."
- Official source
- DC Office of the Chief Financial Officer, "Fiscal Impact Statement – Fiscal Year 2027 Budget Support Act of 2026" (July 7, 2026), describing the Act as enacted (Law 26-189 / Act 26-418, effective Oct. 2, 2026)
- Tax years covered
- Coupling begins TY2026; nothing for 2025.
DC first decoupled from the OBBBA deductions in late 2025 (Act 26-214 / temporary Law 26-98, later disapproved by Congress, P.L. 119-78); the FY 2027 Budget Support Act of 2026 re-coupled to §§224/225 for tax years beginning after December 31, 2025, expressly leaving 2025 decoupled.
Your federal deduction is separate
Whatever your state does, the federal deductions run on their own rules: check your W-2 codes with the W-2 Code Checker, estimate with the Tips Calculator and Overtime Calculator, and see the glossary for any term. All state positions: the state-by-state index.
State position verified October 26, 2026 from the official source above. State guidance changes; confirm on the source before filing. This page is general information, not tax advice.