State Benefit·Washington D.C.·🏛️Tax Benefits

Military Disability Retirement Pay -- DC Income Tax Exclusion

Military disability retirement pay and VA disability compensation are excluded from DC taxable income.

Verified May 12, 2026againstmyarmybenefits.us.army.mil

At a glance

Benefit type: Tax Benefits — Washington D.C.
Who it's for: Veterans
VA rating needed: No rating requirement
Where it applies: Washington D.C.
Last verified: May 12, 2026

What is Military Disability Retirement Pay -- DC Income Tax Exclusion?

Military Disability Retirement Pay -- DC Income Tax Exclusion is a Washington D.C. tax benefits benefit for veterans. Military disability retirement pay and VA disability compensation are excluded from DC taxable income.

Who qualifies

Veterans

Available to any veteran
Washington D.C. residency

How to apply

Apply through the official Washington D.C. agency.

Open application

Who is eligible

Eligibility

Any veteran receiving VA disability compensation or military disability retirement pay.

What Military Disability Retirement Pay -- DC Income Tax Exclusion covers

Covers

Military disability retirement pay received as a pension, annuity, or similar allowance for personal injury or sickness from active service is excluded from DC taxable income. VA disability compensation and pension payments are also excluded from DC taxable income. DC income tax rates range from 4% to 10.75%.

Important to know

Regular (non-disability) military retirement pay IS fully taxable in DC; the District offers no age-based reduction for military retired pay. SBP annuities are excluded for survivors age 62+.

How to apply for Military Disability Retirement Pay -- DC Income Tax Exclusion

How to apply

Claimed on your DC individual income tax return (Form D-40).

Open application Verify at official source

Verified information & sources

Last verified: May 12, 2026

Official source: myarmybenefits.us.army.mil

Compiled and fact-checked against the official source linked above. Benefit rules and dollar amounts change over time — always confirm current details at the official source before applying. A county Veterans Service Officer (VSO) is a free, accredited advocate who can review your eligibility and help you file at no cost.

Frequently asked questions about Military Disability Retirement Pay -- DC Income Tax Exclusion

Who qualifies for Military Disability Retirement Pay -- DC Income Tax Exclusion?▾

Military Disability Retirement Pay -- DC Income Tax Exclusion is for Veterans; available to any veteran; washington d.c. residency. See the eligibility details on this page and confirm with the official source before applying.

How do I apply for Military Disability Retirement Pay -- DC Income Tax Exclusion?▾

Apply through the official source linked on this page. A county Veterans Service Officer (VSO) can review your eligibility and help you file at no cost.

Where can I verify Military Disability Retirement Pay -- DC Income Tax Exclusion?▾

Benefit rules and dollar amounts change, so always confirm current details at the official source linked on this page. A free, accredited county or state Veterans Service Officer (VSO) can also verify your eligibility and help you apply.

Other Washington D.C. Tax Benefits

Disabled Veterans Homestead Deduction (Property Tax)

Up to $445,000 deducted from assessed home value for property tax purposes for 100% disabled veterans meeting income requirements.

~$4,250/year at DC tax rates

See every benefit you qualify for in Washington D.C.

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