DC Financial Chief Warns of Tax-Filing Delays If Law Is Repealed

Washington, DC, officials will likely be forced to suspend income tax-filing deadlines into the fall if congressional Republicans overturn the local law severing the district from parts of the 2025 federal tax law, the District of Columbia’s chief financial officer warned congressional leaders Monday.

Enactment of a joint resolution teed up for votes in both the House and Senate this week would require changes to the district’s tax forms and systems for tax year 2025, Glen Lee wrote in a letter to leaders of both chambers.

The district’s Office of Tax and Revenue would “need to suspend the current filing season until such time as it can make the necessary changes to revert the district’s tax administration system to conform with legal requirements prior to the Tax Amendment Act’s enactment,” he said. DC’s filing season opened Jan. 26.

The office’s managers estimate that adjustments will likely require several months, which would extend the district’s income tax filing deadlines into fall 2026, he wrote. The administrative changes would cost the district’s general fund “millions of dollars of additional expenses” in addition to a $400 million shortfall in revenue collections in fiscal year 2026 while shifting collections into fiscal 2027.

House Republicans are expected to vote this week on H. J. Res. 142, which would disapprove of legislation the district enacted in December (A26-0217) to decouple from portions of last year’s GOP tax law. A Senate committee is also set to hold a markup Wednesday on the House measure and a similar Senate resolution (S. J. Res. 102).

The DC law severed the city’s tax code from the federal tax code’s new tax breaks for tips and overtime and from some federal business tax breaks. Some of the revenue savings resulting from the decoupling would be used to expand DC’s local child tax credit and earned income tax credit.