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posted Jul 26, 2023 9:41:26 AM

Pension

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

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3 Replies
Employee Tax Expert
Jul 26, 2023 9:47:00 AM

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

Expert Alumni
Jul 26, 2023 9:47:57 AM

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

Employee Tax Expert
Jul 26, 2023 9:58:50 AM

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!