Yes, it does appear the income allocated from the LLC allows for the reciprocity agreement. If you are a single-member LLC (SMLLC) the IRS classifies you as a disregarded entity and all income and expenses are made on Federal Form Schedule C as part of your return.
Keep in mind, however, that DC has a filing requirement for LLC's. The following are extracts from nolo.com, the legal encyclopedia:
Limited Liability Companies (LLCs). Standard LLCs are pass-through entities. In most states, LLCs are not required to pay income tax to either the federal or state government. In DC, however, LLCs are subject to the District's unincorporated franchise tax. In addition, income from the LLC is distributed to individual members, who then pay federal and state taxes on the amounts allocated to them.
Also note that while, by default, LLCs are classified for tax purposes as partnerships (or, for single-member LLCs, disregarded entities), it is possible to elect to have your LLC classified as a corporation. In that case, the LLC would also be subject to District of Columbia's corporate franchise tax.
Biennial Report
The District of Columbia requires you to file a biennial report for your LLC. The first biennial report is due April 1 of the calendar following the year in which you formed your LLC. Subsequent biennial reports are due on April 1 each second calendar year thereafter. You can file your biennial report online at the DCRA website or in person at the Business License Center. The current filing fee is $300. There is a $100 penalty for reports filed late. Reports filed in person incur an additional expedited processing fee.
State Business Taxes
When it comes to income taxes, most LLCs are so-called pass-through tax entities. In other words, the responsibility for paying federal income taxes passes through the LLC itself and falls on the individual LLC members. By default, LLCs themselves do not pay federal income taxes, only their members do.
The District of Columbia, however, imposes a separate franchise tax on some LLCs. Generally speaking, the tax applies to unincorporated businesses with gross income of more than $12,000 from D.C. sources and that are not otherwise exempt. The tax is usually calculated at a flat rate of taxable income. There is also a $250 minimum franchise tax. The tax is payable to the Office of Tax and Revenue (OTR) using Form D-30. If your tax year matches the calendar year, the tax is due on April 15. For more information, check the OTR website.
In some cases, the owners of an LLC choose to have their business treated like a corporation for tax purposes. This choice is made by filing IRS Form 2553 with the IRS. (See the IRS website for the form.) Unlike the default pass-through tax situation, when an LLC elects to be taxed as a corporation, the company itself must file a separate tax return. The District of Columbia, like almost every other state, taxes corporation income. In the District of Columbia, this occurs via the business franchise tax and using a small series of marginal tax rates applied to taxable income. If you have chosen to have your LLC taxed as a corporation you'll need to pay this tax. Use the OTR's corporation franchise tax return (Form D-20) to pay the tax. For more details, including regarding online filing, check the OTR website.
@Kedo72
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