D.C. Code § 47-1803.02

Current through codified legislation effective September 18, 2024

Section 47-1803.02 - Gross income - Items included and excluded; "adjusted gross income" defined

(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.

(1A) Repealed.

(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.

(O) Repealed.

(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.

(Q) Repealed.

(R) A relocation payment received under section 205 or 206 of the Housing Act of 2001 [§ 42-2851.05 or § 42-2851.06].

(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).

(X) Loans awarded and subsequently forgiven under [part F of subchapter IV of Chapter 3 of Title 1].

(Y) Fees retained by a retail establishment under [§ 8-102.03(b)(1)].

(Z) Computations of discharge of indebtedness income under section 108(i) of the Internal Revenue Code of 1986.

(AA) The amount received by a taxpayer pursuant to § 8-1774.09.

(BB) The amount received by a taxpayer from the following programs, whose funding is authorized by [§ 8-152.02]:

(i) RiverSmart Communities: Demonstration Program;

(ii) RiverSmart Homes Incentive Program;

(iii) RiverSmart Homes Rebate Program; or

(iv) RiverSmart Rooftops Greenroof Rebate Program.

(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].

(EE) Not Funded.

(FF) The amount received by a taxpayer pursuant to § 7-2831(b).

(GG) Small business loans awarded and subsequently forgiven under section 7 A 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).

(II) Public health emergency grants authorized pursuant to section 16(m)(1) of the Advisory Neighborhood Commissions Act of 1975, effective March 26, 1976 (D.C. Law 1-58; D.C. Official Code § 1-309.13(m)(1) ).

(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 5 b of the District of Columbia Public Emergency Act of 1980, effective June 24, 2021 (D.C. Law 24-9; D.C. Official Code § 7-2304.02 ), or successor law.

(LL) For taxable years beginning after December 31, 2020, unemployment insurance benefits provided by the District or any other state, including:

(i) District-funded benefits paid pursuant to subchapter I of Chapter 1 of Title 51 of the District of Columbia Official Code or a similar program in another state, including any extension of such benefits;

(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.

(MM) Grants issued pursuant to section 2032(h)(1)(A) of the Deputy Mayor for Planning and Economic Development Limited Grant Making Authority Act of 2012, effective September 20, 2012 (D.C. Law 19-168; D.C. Official Code § 1-328.04(h)(1)(A) ).

(NN) The following grants made by the Deputy Mayor for Planning and Economic Development, as authorized by section 2032 of the Deputy Mayor for Planning and Economic Development Limited Grant-Making Authority Act of 2012, effective September 12, 2012 (D.C. Law 19-168; D.C. Official Code § 1-328.04 ) ("section 2032 "):

(i) Small business rent relief grants awarded pursuant to section 2032(l);

(ii) Grants awarded to the DC Center for the LQBT Community pursuant to section 2032(m);

(iii) Large company grants awarded pursuant to section 2032(n);

(iv) Local food access grants awarded pursuant to section 2032(o);

(v) Guaranteed income pilot program grants awarded pursuant to section 2032(p);

(vi) Grants awarded to Community Development Financial Institutions or Minority Depository Institutions pursuant to section 2032(q);

(vii) Equity growth impact grants awarded pursuant to section 2032(r);

(viii) Great Streets program grants awarded pursuant to section 2032(s);

(ix) Bridge Fund recovery and special events support grants awarded pursuant to section 2032(t);

(x) Small and medium business recover and growth program grants awarded pursuant to section 2032(u); and

(xi) Equity impact enterprise commercial property acquisition grants awarded pursuant to section 2032(v).

(OO) COVID-19 hotel recovery grants awarded pursuant to section 2192 of the COVID-19 Hotel Recovery Grant Program Act of 2021, passed on 2nd reading August 10, 2021 (Enrolled version of Bill 24-285).

(PP) Delayed unemployment compensation payments made pursuant to section 7(j) of the District of Columbia Unemployment Compensation Act, approved August 28, 1935 (49 Stat. 949; D.C. Official Code § 51-107(j) ).

(QQ) The amount received by an individual pursuant to section 6 of the Child Wealth Building Act of 2021, as introduced on May 3, 2021 (Bill 24-236).

(RR) Grants awarded pursuant to § 1-328.04(w).

(SS) Grants awarded pursuant to § 1-328.04(x).

(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.

(UU) Grants issued pursuant to § 8-1774.10(c)(22).

(VV) Rebates issued pursuant to section 5 a of the Public Access to Automated External Defibrillator Act of 2000, passed on 2nd reading on June 7, 2022 (Enrolled version of Bill 24-714).

(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 Title I of the High-Need Healthcare Career Scholarship and Supports Program Amendment Act of 2022, passed on 2nd reading on December 20, 2022 (Enrolled version of Bill 24-943).

(YY) A subsidy provided pursuant to Title VI of the Department of Transportation Establishment Act of 2002, passed on 2nd reading on December 20, 2022 (Enrolled version of Bill 24-429).

(ZZ) Rebates issued pursuant to section 9r of the Department of Transportation Establishment Act of 2002, passed on 2nd reading on September 19, 2023 (Enrolled version of Bill 25-115).

(AAA) Benefits provided through the Breathe Easy Program, established by section 217 of the Clean and Affordable Energy Act of 2008, passed on 2nd reading on May 7, 2024 (Enrolled version of Bill 25-119).

(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.

(c) Repealed.

D.C. Code § 47-1803.02

Amended by D.C. Law 25-189,§ 5, 71 DCR 006770, eff. 7/19/2024.

Amended by D.C. Law 25-66,§ 3, 70 DCR 013825, eff. 11/28/2023.

Amended by D.C. Law 24-335, § 3 , 70 DCR 001562, eff. 3/22/2023.

Amended by D.C. Law 24-313, § II-201 , 70 DCR 000600, eff. 3/10/2023.

Amended by D.C. Law 24-184, § II-201 , 69 DCR 009340, eff. 9/21/2022, exp. 5/4/2023.

Amended by D.C. Law 24-167, § VII-E-7042 , 69 DCR 009223, eff. 9/21/2022.

Amended by D.C. Law 24-162, § 3 , 69 DCR 008833, eff. 9/9/2022, exp. 4/22/2023.

Amended by D.C. Law 24-53, § 10 , 68 DCR 013227, eff. 2/18/2022.

Amended by D.C. Law 24-45, § VII-C-7112 , 68 DCR 010163, eff. 11/13/2021.

Amended by D.C. Law 24-155, § 2 , 0 DCR 0, eff. 8/5/2021, exp. 11/3/2021.

Amended by D.C. Law 24-21, § 2 , 68 DCR 006444, eff. 8/21/2021, exp. 4/3/2022.

Amended by D.C. Law 24-9, § II-207 , 68 DCR 004824, eff. 6/24/2021, exp. 2/4/2022.

Amended by D.C. Law 24-83, § 2, eff. 5/25/2021, exp. 8/23/2021.

Amended by D.C. Law 23-149, § VII-S-7213 , 67 DCR 10493, eff. 12/3/2020.

Amended by D.C. Act 23-405, § II-207 , 67 DCR 9400, eff. 8/19/2020.

July 16, 1947, 61 Stat. 335, ch. 258, art. I, title III, § 2; May 3, 1948, 62 Stat. 207, ch. 246, § 3; May 27, 1949, 63 Stat. 130, ch. 146, title IV, §§ 403, 420; Sept. 4, 1957, 71 Stat. 605, Pub. L. 85-281, §§ 1, 3; June 27, 1960, 74 Stat. 219, Pub. L. 86-522, § 1; Sept. 19, 1966, 80 Stat. 812, Pub. L. 89-591, § 1; Oct. 31, 1969, 83 Stat. 176, 177, Pub. L. 91-106, title VI, §§ 601(b)(1), (2), 602; Oct. 21, 1975, D.C. Law 1-23, title VI, § 601(4), 22 DCR 2106; Apr. 19, 1977, D.C. Law 1-124, title IV, § 401(a), 23 DCR 8749; Mar. 6, 1979, D.C. Law 2-158, § 4, 25 DCR 7002; Sept. 13, 1980, D.C. Law 3-95, § 103(a), 27 DCR 3509; June 11, 1982, D.C. Law 4-118, § 103, 29 DCR 1770; July 24, 1982, D.C. Law 4-130, § 2, 29 DCR 2412; Sept. 17, 1982, D.C. Law 4-150, § 102, 29 DCR 3377; Oct. 8, 1983, D.C. Law 5-32, § 3(a), (b), 30 DCR 4013; Sept. 26, 1984, D.C. Law 5-118, § 6(c), 31 DCR 4034; Mar. 14, 1985, D.C. Law 5-147, § 2(b), 31 DCR 6416; July 24, 1986, D.C. Law 6-129, § 2(a), 33 DCR 3221; June 24, 1987, D.C. Law 7-9, § 2(d), (e), 34 DCR 3283; Oct. 1, 1987, D.C. Law 7-29, § 2(c)(1)-(4), 34 DCR 5097; July 8, 1988, D.C. Law 7-130, § 2(a), 35 DCR 4104; Sept. 21, 1988, D.C. Law 7-145, § 2(a), 35 DCR 5407; July 25, 1989, D.C. Law 8-17, § 2(a), 36 DCR 4160; Mar. 20, 1992, D.C. Law 9-86, § 2, 39 DCR 716; enacted, Apr. 9, 1997, D.C. Law 11-254, § 2, 44 DCR 1575; Apr. 3, 2001, D.C. Law 13-256, § 406, 48 DCR 730; Apr. 19, 2002, D.C. Law 14-114, §§ 292(a), 302(b)(1), 901(b)(1), 49 DCR 1468; June 25, 2002, D.C. Law 14-165, § 2(b)(1), 49 DCR 4261; Oct. 19, 2002, D.C. Law 14-213, § 33(r), 49 DCR 8140; Mar. 13, 2004, D.C. Law 15-105, § 107, 51 DCR 881; Oct. 20, 2005, D.C. Law 16-33, § 1291, 52 DCR 7503; Mar. 8, 2006, D.C. Law 16-59, § 2, 53 DCR 17; Mar. 14, 2007, D.C. Law 16-294, § 16, 54 DCR 1086; Apr. 24, 2007, D.C. Law 16-305, § 73(d), 53 DCR 6198; Sept. 23, 2009, D.C. Law 18-55, § 9(a)(2), 56 DCR 5703; Mar. 3, 2010, D.C. Law 18-111, § 7121, 57 DCR 181; Mar. 12, 2011, D.C. Law 18-316, § 2, 57 DCR 12416; Mar. 31, 2011, D.C. Law 18-331, § 4, 58 DCR 22; Sept. 14, 2011, D.C. Law 19-21, § 8152, 58 DCR 6226; Sept. 20, 2012, D.C. Law 19-168, §§ 7152, 8009(a), 59 DCR 8025; Sept. 26, 2012, D.C. Law 19-171, § 118, 59 DCR 6190; Mar. 5, 2013, D.C. Law 19-211, § 2(b), 59 DCR 13281; Apr. 20, 2013, D.C. Law 19-262, § 112, 60 DCR 1300; Dec. 24, 2013, D.C. Law 20-61, § 7082, 60 DCR 12472; Feb. 26, 2015, D.C. Law 20-155, § 7012(c)(2), 61 DCR 9990; Oct. 22, 2015, D.C. Law 21-36, § 7039, 62 DCR 10905; Nov. 26, 2016, D.C. Law 21-168, § 3, 63 DCR 12594; July 17, 2018, D.C. Law 22-146, § 3, 65 DCR 5984; July 27, 2018, D.C. Law 22-151, § 4, 65 DCR 6123; Oct. 30, 2018, D.C. Law 22-168, § 7062, 65 DCR 9388; May 27, 2020, D.C. Act 23-326, § 207(b), 0 DCR 0.

Applicability and expiration of §§ 1292 and 1293 of D.C. Law 16-33: Sections 1292 and 1293 of D.C. Law 16-33, as amended by D.C. Law 17-219, § 7068(j), (k), provided:

"Sec. 1292. Conditional applicability.

"(a) Section 1291 shall apply for taxable years beginning after September 30, 2005.

"(b) Repealed.

"Sec. 1293. Repealed."

Section 3 of D.C. Law 18-316 provided: "Sec. 3. Applicability. Section 2 shall apply as of January 1, 2010."

Section 8153 of D.C. Law 19-21 provided: "Sec. 8153. Applicability. This subtitle shall apply for tax years beginning January 1, 2011."

Section 105(d) of the Internal Revenue Code of 1986, 26 U.S.C. § 105(d), referred to in (a)(2)(M), was repealed by Pub. L. 98-21, title I, § 122(b), April 20, 1983, 97 Stat. 87.

Mayor authorized to issue regulations: Section 401 of D.C. Law 4-150 and § 9 of D.C. Law 5-32 provided that the Mayor shall issue regulations necessary to carry out the provisions of these acts.

Tax exemption: See § 40-853.

Section 3 of D.C. Law 14-165 provided that section 2 shall apply to taxable years beginning on January 1, 2001.

Section 7153 of D.C. Law 19-171 provided that the amendment by D.C. Law 19-171, § 7152 shall apply upon certification by the Chief Financial Officer that sufficient revenue is available in the June 2012, September 2012, or December 2012 revenue estimates to fund section 10002(a)(1) through (27) of the Revised Revenue Estimate Contingency Priority List Act of 2012, passed on 2nd reading on June 5, 2012 (Enrolled version of Bill 19-743) [D.C. Law 19-168].

As of date of incorporation of this provision into this section, the CFO has not made the certification required by D.C. Law 19-171, § 7153; therefore, the amendment made by D.C. Law 19-171, § 7152, has not been given effect.

Applicability of D.C. Law 20-61: Section 11001 of D.C. Law 20-61 provided that, except as otherwise provided, the act shall apply as of October 1, 2013.

Applicability

Section 7063 of D.C. Law 22-168 provided that the amendment made to this section by section 7062 of D.C. Law 22-168 shall apply as of January 1, 2018.

Applicability of D.C. Law 22-151: § 5 of D.C. Law 22-151 provided that the change made to this section by § 4 of D.C. Law 22-151 is subject to the inclusion of the law's fiscal effect in an approved budget and financial plan. Therefore that amendment has not been implemented.

Applicability of D.C. Law 21-168: § 4 of D.C. Law 21-168 provided that the change made to this section by § 3 of D.C. Law 21-168 is subject to the inclusion of the law's fiscal effect in an approved budget and financial plan. Therefore that amendment has not been implemented.