District of Columbia
The District of Columbia Exempts Poor Families from the Income Tax But Has a High Tax on the Near-Poor
The District of Columbias 1999 income tax threshold the income level at which families begin paying income tax:
Ranking among 42 states with income taxes
For two-parent families of four: $18,200.
20th highest (tie)
For single-parent families of three: $14,600.
19th highest (tie)
The District of Columbias 1999 income tax on working-poor and near-poor families:
No tax on families with incomes at the poverty line ($17,028 for family of four, $13,290 for family of three). No tax on families of three or four with full-time minimum-wage earnings ($12,792).
For families of three with incomes at 125% of the poverty line ($16,613): $548.
For families of four with incomes at 125% of the poverty line ($21,285): $906.
The District of Columbia has consistently exempted families with below-poverty earnings from the income tax.
The District of Columbias tax threshold has risen in step with the poverty line in the 1990s.
The District of Columbia has an unusual low-income credit that eliminates tax liability for families with incomes up to the threshold but leaves families with incomes just above the threshold with substantial tax liability.