§ 47–1803.02. Gross income — Items included and excluded; “adjusted gross income” defined.
*NOTE: This section includes amendments by temporary legislation that will expire on May 4, 2023. To view the text of this section after the expiration of all emergency and temporary legislation, click this link: Permanent Version.*
(a)Gross income. — The words “gross income” shall have the same meaning as defined in § 61 of the Internal Revenue Code of 1986. In addition to the items specifically included or excluded by reference to § 61(b) of the Internal Revenue Code of 1986, the following items shall also be included or excluded in the computation of District gross income:
(1)(A) For taxpayers other than individuals, estates, and trusts, interest upon the obligations of a state, territory of the United States, or any political subdivision thereof, but not including the District, shall be included in the computation of District gross income.
(B) Individuals, estates, and trusts shall not, and shall not have been required to, include interest on the obligations of the District of Columbia, a state, a territory of the United States, or any political subdivision thereof, in the computation of District gross income.
(C) Nothing in this paragraph shall be construed as repealing or limiting the provisions of § 9-921.
(2) The following items shall be excluded in the computation of District gross income:
(A) After January 23, 1983, interest and dividend income on obligations or securities of the United States, or its agencies or instrumentalities, to the extent that this income is included in federal gross income.
(B) The amount of any income or gain included in the taxpayer’s federal gross income for the taxable year to the extent that it was included as income or gain in an income or franchise tax return filed by:
(i) The taxpayer with the District for any taxable year beginning prior to January 1, 1982; or
(ii) An individual by reason of whose death the taxpayer acquired the right to receive the income or gain.
(C) The amount of any trust distribution to the taxpayer included in his federal gross income for the taxable year to the extent that such amount was previously taxed to the trust by the District.
(D) In the case of any person entitled to the distributive share of a trade or business net income that is from an unincorporated business as defined in § 47-1808.01, an amount equal to the pro rata distributive share, to the extent that portion of the distributive share so excluded is directly or indirectly reported by and taxed against any person under the provisions of this chapter.
(E) Any state or local income tax refund included in federal gross income.
(F) Income received or, in the case of a taxpayer reporting on an accrual basis, income accrued when the taxpayer was not a resident of the District.
(G) Income of any kind to the extent required by any treaty obligation of the United States, including reciprocal agreements between the United States and other countries relating to the taxability of their respective airlines and ships under foreign flag owned by foreign corporations.
(H) In the case of an International Banking Facility the gross income to the parent depository institution resulting from any IBF time deposit or any IBF loan; provided, however, that no expense or loss attributable to such income shall be allowed as a deduction under any other provision of this chapter, and; provided, further, that this exclusion from gross income shall not include any amount derived by an International Banking Facility from IBF time deposits or IBF loans if the loan or deposit of funds is secured by a mortgage, deed of trust, or other lien upon real property located within the District of Columbia.
(I) Income derived from the sale of tangible personal property to the United States by corporations and unincorporated businesses having their principal places of business located outside the District, which property is delivered from places outside the District for use outside the District; provided, however, that the taxpayer shall furnish to the Mayor a statement in writing of the amount of gross sales so made and, if required by the Mayor, a list of the names of the agencies of the United States through which such property was sold.
(J) Dues and initiation fees in the case of any club organized and operated exclusively for pleasure and recreation, no part of the net earnings of which inures to the benefit of any private individual or shareholder. As used in this subparagraph, the term “dues” means only sums paid or incurred by members on a monthly, quarterly, annual, or other periodic basis for the privilege of being members of such club and any pro rata assessment made against the members as such. The term “dues” does not include any sums paid or incurred by members or their guests for food, beverages, or other tangible personal property purchased or for the use of the club’s social, athletic, sporting, and other facilities. The term “initiation fees” includes any payment, contribution, or loan, required as a condition precedent to membership, whether or not any such payment, contribution, or loan is evidenced by a certificate of interest or indebtedness.
(K) The amount of any compensation deferred under the employee deferred compensation program pursuant to § 47-3601; provided, that the amount of any such compensation or any income attributable to the amount of compensation so deferred shall be includable in gross income for the taxable years in which such compensation or other income is paid or otherwise made available to the employee or other beneficiary.
(L) Social security and tier 1 railroad retirement benefits subject to taxation under § 86 of the Internal Revenue Code of 1986.
(M) Certain disability income payments excludable under § 105(d) of the Internal Revenue Code of 1986 before the enactment of the Social Security Amendments of 1983 (26 U.S.C. § 86).
(N)(i) Pension, military retired pay, or annuity income received from the District of Columbia or the federal government by persons who are 62 years of age or older by the end of the taxable year, except that the exclusion shall not exceed the lesser of $3,000 or the actual amount of the pension, military retired pay, or annuity received during the taxable years; provided, that the pension, military retired pay, or annuity is otherwise subject to taxation under this chapter; provided further, that this sub-subparagraph shall apply for taxable years beginning before January 1, 2015.
(ii) Survivor benefits received from the District of Columbia or the federal government by persons who are 62 years of age or older by the end of the taxable year.
(P) In the case of any person entitled to a share in the income of any corporation which is an S corporation as defined in section 1361(a) of the Internal Revenue Code of 1986, an amount equal to the pro rata share of the income, to the extent that the portion of the income so excluded is directly or indirectly reported by and taxed against any person under the provisions of this chapter.
(S) The proceeds from the sale of, or the use of a transferred, tax credit under § 47-1806.08c [repealed].
(T) Homeownership assistance received by the eligible employee through a certified employer-assisted home purchase program, as those terms are defined in § 47-1807.07, and used for the purchase of a qualified residential real property.
(U) The amount received by a claimant, excluding backpay (as defined in § 47-1806.10(3) [§ 47-1806.10(a)(3)]), frontpay (as defined in § 47-1806.10(5) [§ 47-1806.10(a)(5)]), or punitive damages, whether by agreement (as reasonably allocated) or suit and whether as a lump sum or periodic payments, on account of a claim of unlawful discrimination.
(V) Income derived from any source, not to exceed $10,000, for a person who has been determined to have a permanent and total disability by the Social Security Administration, is receiving Supplemental Security Income or Social Security Disability, is receiving railroad retirement disability benefits, or is receiving federal or District of Columbia government disability payments; and, whose household adjusted gross income, as defined in § 47-863(a)(2), is less than $100,000.
(W) The amount of any health care insurance premium paid by an employer for a non-employee domestic partner, as the term “domestic partner” is defined in § 32-701(3).
(CC) The amount received by a taxpayer pursuant to [§ 7-551.01].
(DD) The amount received by a taxpayer from the Home Composting Incentive Program pursuant to [§ 8-1031.12a].
(FF) The amount received by a taxpayer pursuant to § 7-2831(b).
(GG) Small business loans awarded and subsequently forgiven under section 7A of the Small Business Act, approved March 27, 2020 (134 Stat. 297; 15 U.S.C. § 636m).
(HH) Public health emergency small business grants awarded pursuant to section 2316 of the Small and Certified Business Enterprise Development and Assistance Act of 2005, effective June 24, 2021 (D.C. Law 24-9; 68 DCR 6913) [Expired].
(JJ) Cash assistance for excluded workers given pursuant to grants awarded by the Washington Convention and Sports Authority after taxable year ending December 31, 2019, and ending before January 1, 2024.
(KK) For tax years beginning after December 31, 2020, public health emergency response grants issued pursuant to section 5b of the District of Columbia Public Act of 1980, effective June 24, 2021 (D.C. Law 24-9; D.C. Official Code § 7-2304.02) [Expired], or successor law.
(LL) For taxable years beginning after December 31, 2020, unemployment insurance benefits provided by the District or any other state, including:
(ii) Fully or partially federally funded benefits paid pursuant to temporary or permanent unemployment benefits programs, including Federal Pandemic Unemployment Compensation provided for by section 2104 of Division A of the Coronavirus Aid, Relief, and Economic Security Act, approved March 27, 2020 (134 Stat. 318; 15 U.S.C. § 9023); and
(iii) Benefits paid pursuant to special programs, including Disaster Unemployment Assistance provided for by section 410 of the Disaster Relief Act of 1974, approved May 22, 1974 (88 Stat. 156; 42 U.S.C. § 5177), or Pandemic Unemployment Assistance provided for by section 2102 of Division A of the Coronavirus Aid, Relief, and Economic Security Act, approved March 27, 2020 (134 Stat. 313; 15 U.S.C. § 9021), to individuals who do not qualify for regular unemployment insurance benefits.
(TT) Funding received by a taxpayer from the District Department of the Environment or the District of Columbia Sustainable Energy Utility to incentivize solar installations benefiting low-income residents pursuant to the Solar for All Program, established by § 8-1774.16.
(WW) Lump-sum payments an individual receives from the early educator pay parity program created and implemented pursuant to § 1-325.431(c)(1A).
(XX) The amount received by an individual or a school or program on behalf of an individual to cover the individual's tuition, fees, or other expenses pursuant to [Chapter 7F of Title 7].
(3) The monetary assistance provided to an owner of a housing accommodation under section 8 of the United States Housing Act of 1937, approved August 22, 1974 (88 Stat. 662; 42 U.S.C. § 1437f), either directly or through a tenant, shall be income.
(a-1) Notwithstanding subsection (a) of this section, for the purposes of the deduction for state sales and excise taxes on the purchase of certain motor vehicles, the term “gross income” shall have the same meaning as set forth in section 61 of the Internal Revenue Code of 1986, as that section existed on December 31, 2008.
(b)Adjusted gross income. — The words “adjusted gross income” as used in this chapter mean:
(1) In the case of an individual, estate, or trust, the same meaning as defined in § 62 of the Internal Revenue Code of 1986; and
(2) In the case of an individual, estate, or trust not required to file a District return for a complete calendar or fiscal year, gross income reported under subsection (a) of this section, less deductions allowed under § 62 of the Internal Revenue Code of 1986, which were paid or accrued during the period covered by the District return.