All District of Columbia employers that are subject to the federal income tax law must withhold District income taxes from wages paid to resident employees. Employers may calculate the amount that must be withheld from employees' paychecks using either the wage bracket tables or the percentage method; detailed information about both methods is available from the Office of Tax and Revenue (OTR).
The term “employer” means employer as defined in Section 3401(d) of the Internal Revenue Code of 1986 and includes any person, firm, or corporation (including organizations that may themselves be exempt from income tax, such as religious organizations), as well as the federal or district governments and any agency, instrumentality, or political subdivision of those governments, employing or using the services of one or more individuals for hire, remuneration, or compensation of any kind.
District withholding applies to all wages subject to federal withholding. In addition, income tax must be withheld each pay period from wages of certain employees who may be exempt from federal withholding, who have certified that they have no federal tax liability.