District of Columbia Enacts Emergency Legislation

The District of Columbia enacted income tax credits, a deduction and an exemption for:

– qualified business income;

– the private security camera system incentive program;

– retailer property tax relief; and

– early learning.

Qualified Business Income Tax Deduction

The District clarifies that individual income taxpayers are allowed the deduction available under IRC Sec. 199A (qualified business income deduction), after 2017.

Private Security Camera System Incentive Program Rebate

Beginning January 1, 2018, the District excludes rebates taxpayers receive from the Private Security Camera System Incentive Program from tax.

Retailer Property Tax Relief Credit

Qualified retailers with less than $2.5 million in federal gross receipts or sales may claim a credit equal to:

– 10% of the total rent paid by the corporation for a qualified rental retail location, not over $5,000; or

– the lesser of the total Class 2 real property taxes paid for an owned qualified retail location or $5,000.

The credit cannot exceed the qualified corporation’s tax liability. The credit is available after 2017 for use against the income and franchise taxes.

Early Learning Tax Credit

After 2017, a taxpayer can claim a credit for eligible child care expenses. The credit is for the lesser of:

– the total amount of all eligible child care expenses paid by the taxpayer in the tax year; or

– $1,000 per eligible child.

The credit can exceed the taxpayer’s tax liability for a tax year and is refundable to the taxpayer claiming the credit. The taxpayer must claim the eligible child as a dependent on their federal and District income tax return.

The taxpayer is not allowed to claim the credit if their income exceeds:

– $750,000 for taxpayers filing as single, head of household, or married filing jointly; or

– $375,000 married filing separately.

The income amounts will be adjusted annually for inflation.

Act 22-458 (D.C.B. 22-922), Laws 2017, effective October 3, 2018, for a 30-day period that expires December 31, 2018

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