4 UNEMPLOYMENT TAXES
If you are an employer in the District of Columbia with at
least one full-time or part-time employee, you are required to
register Part VI of the Combined Business Tax Registration
Form for unemployment taxes. Each employer that is
determined liable for taxes is assigned an account number.
This number identifies the employer’s individual account,
which is a record of taxes paid by the employer and charges
made against the employer by former employees.
Liable employers must file quarterly tax and wage reports
with the Department of Employment Services Tax
Division on or before the last day of April, July, October,
and January of each year. Reporting forms imprinted
with your information will be mailed to you roughly five
weeks before each due date. Employers who employ
only household employees may elect to file tax and wage
reports annually rather than quarterly. Learn more at
does.dc.gov, or call (202) 724-7000.
The amount of tax due is based on a specified tax rate
of taxable wages for the quarter. As the employer you
are solely responsible for the taxes—no part of the tax
should be deducted from the employee’s wages. Taxes are
based on gross wages before any amount is withheld for
any purpose. Gross wages include salaries, commissions,
bonuses, and the cash value of any remuneration payable
to the employee in a medium other than cash (i.e., lodging,
meals, etc.). Taxes are payable for the first $9,000 paid
to each employee during a calendar year. A newly liable
employer pays taxes at the rate of 2.7% or an average
rate paid by all employers during the preceding year,
whichever is higher. Nonprofit organizations covered
under the Unemployment Compensation law may elect
to reimburse DOES for benefits paid to their former
employees, rather than pay quarterly contributions at a
predetermined rate.
For more information on the District’s compensation law
pertaining to taxes, contact the Office of Unemployment
Compensation, Tax Division at (202) 698-7550.
BUSINESS TAXES DC DOING BUSINESS GUIDE 2018/2019 57
FOR NONPROFIT ORGANIZATIONS
If you are exempt from federal unemployment taxes, you have
two options to finance unemployment insurance coverage:
Payment of contributions at the rate assigned by the DC
Department of Employment Services. The rate is applied to
the taxable wages earned by each employee during a calendar
year. Contributions are paid on a quarterly calendar basis.
–or–
Reimbursement of the trust fund. At the end of each calendar
quarter, the employer is billed for unemployment benefits
paid to its former employees during the quarter.
EMPLOYER WITHHOLDING FORMS
All employers with businesses located in DC are required to
deduct and withhold District income tax from employees’
wages and pay the District the exact amount of withholding
as shown in the withholding tables.
DELINQUENT ON TAXES
As a new business owner, it is critically important that you
understand and comply with all of the tax requirements
based on your business type and operations. The DC
Office of Tax and Revenue encourages businesses and
individuals that are not in compliance with District tax
laws to bring their accounts into compliance through
the Voluntary Disclosure Program. Participation in
the Voluntary Disclosure Program can be anonymous
or under the taxpayer’s identity. OTR will waive civil
penalties if the tax and interest is paid in full.
SMALL RETAILER PROPERTY TAX RELIEF
For taxable year beginning after December 31, 2017, a
qualified corporation, or qualified unincorporated business,
may claim a credit against corporate or unincorporated
business franchise tax. The credit is equal to 10% of the
total rent paid for the qualified retail location during
taxable year not to exceed $5,000. Or a tax credit equal to
the total class 2 real property taxes, pursuant to Section
47-811 paid for qualified retail owned location during the
taxable year not to exceed the lessor of real property tax
paid or $5,000. The Small Retailer must complete schedule
SR For details and eligibility requirements refer to District
official code section 47-1807.14 or 47-1808.14.
/does.dc.gov
