What the rule says
DC imposes an estate tax under D.C. Code § 47-3702 et seq. DC's framework is mid-range among state-level estate taxes:
Mid-range threshold
The DC estate tax exclusion is approximately $4.873 million per individual (indexed annually for inflation; the exact figure for the year of the decedent's death applies).
DC's threshold is between: - Federal estate tax: ~$13.99M (2026) - Connecticut: $13.99M (federal-conformed) - New York: $7.16M - Maine: ~$6.8M (indexed) - Vermont: $5M - DC: ~$4.873M (indexed) - Illinois: $4M - Minnesota: $3M - Massachusetts: $2M - Rhode Island: ~$1.77M (indexed) - Oregon: $1M
No portability
DC does not recognize federal portability of unused exclusion between spouses. Each spouse's $4.873M exclusion is used at that spouse's death; it cannot be transferred to the surviving spouse.
Tax rates
DC applies progressive rates above the threshold. The top rate is 16% — same as MA, NY, MN, OR, RI, VT.
DC threshold history
DC's estate tax threshold has been adjusted multiple times:
- 2018-2020: Threshold reduced from federal-conformed ($11.18M) to $5.6M - 2021: Threshold further reduced to $4M - Subsequent years: Indexed annually for inflation - Current (~$4.873M): Reflects accumulated inflation indexing
The series of reductions made DC's framework more aggressive over recent years, reflecting policy choices about state revenue and progressive taxation.
What this means in practice
DC's mid-range threshold + no portability framework produces:
- Many high-value DC estates face DC estate tax. With DC real estate values, retirement accounts, and other assets, many high-value estates exceed $4.873M. - DC married couples face DC-specific planning. Without portability, the first-deceased spouse's $4.873M exclusion is wasted unless captured through bypass trust planning. - Federal estate tax for largest estates. Estates above ~$13.99M face both DC and federal estate tax.
For an estate of $7 million: - No federal estate tax (below $13.99M) - DC estate tax on approximately $2.13M of taxable estate at progressive rates up to 16% — approximately $250,000-$300,000
What you can do about it
For DC residents with substantial assets:
- Calculate DC estate tax exposure. $4.873M threshold and no portability rule drive planning. - Use bypass trust planning for married couples to capture both spouses' exclusions. - Consider QTIP elections strategically. - Use lifetime gifting. DC has no separate gift tax. - Consider charitable bequests. - Engage a DC estate tax advisor.
For non-DC residents considering relocation:
- Virginia (no state estate tax) and Maryland (estate AND inheritance tax) are the immediate alternatives. - DC real estate remains taxable even for non-resident decedents. - DC residency vs. Virginia residency is a common DC-area planning question for residents who can choose.
Who this affects most
DC's estate tax framework is most consequential for:
- High-net-worth DC residents whose estates approach $4.873M - Married DC couples whose combined assets exceed $4.873M (no portability requires planning) - Estate planners coordinating DC-specific exposure with federal planning - DC-area families considering DC vs. Virginia vs. Maryland residence
DC's mid-range threshold makes the estate tax less aggressive than MA/RI/IL/MN/OR but more relevant than CT or no-tax states. Bypass trust planning is the standard response for married couples above the threshold.