Pension

3 replies
39 views

Hello,

I am retiring in Oct. 2023, I am having 3 pension pay me out as Lump Sums. I know they are taking 20% each for Federal; Do I have to also pay state taxes, I live in Washington, DC?

thanks

Ask the Experts - Retirement - July 2023

John-H2021

Level 6

Hello Tucker,

Congratulations on retirement.

Yes Washington DC will also tax you on the distribution. You can see if the pension company will withhold those taxes for you also

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kthomasusa1

Level 2

Congratulations on October retirement,

Retirement Income is generally considered taxable in DC. The District of Columbia (DC) does not tax Social Security Benefits or Railroad Tier I retirement benefits.

Kelly C, CPA

JandKit

Level 6

Hi Tuckergreen!

You've received very good responses from the forum today! Let me add to the chorus by saving that D.C ia a Federal Entity and has no separate state tax. It does have a progressive district income tax if they live in the District for at least 183 days in the year. Rates are a bit higher than the national average and can range from 4 to 10.75%.

Here mis a tax calculator that may prove to be very helpful for you:

https://smartasset.com/taxes/district-of-columbia-tax-calculator

Thank you for being a part of this forum!

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