Quick Answer
- LLCs, sole proprietors, partnerships, trusts renting DC property → File D-30 if gross rental income exceeds $12,000/year
- Corporations → File D-20 (not D-30)
- Under $12,000? → Technically not required, but we strongly recommend filing a zero return anyway (see why below)
Who Must File a D-30
In Washington, D.C., rental income is considered business income. Sole proprietors, LLCs, partnerships, and trusts are considered unincorporated businesses for DC tax purposes. If you operate as an unincorporated business that earns rental income from D.C. real property, you must file a D-30 Unincorporated Franchise Return with the D.C. Office of Tax and Revenue each year that the business has a gross income over $12,000 (whether or not it has a net income).
The $12,000 Threshold Explained
What counts as "gross income"?
Gross income determines if you need to file. Gross income includes revenue from all D.C. sources after you deduct the cost of goods sold, but before you take off expenses and other deductions allowed when you calculate net income.
Example:
You collected $18,000 in rent for the year. You had $7,000 in expenses (repairs, insurance, property management fees, etc.). Your gross income is $18,000 (not $11,000), so you must file a D-30.
⚠️ IMPORTANT: What If I'm Under $12,000?
While you're technically not required to file, OTR may still flag your business for non-compliance during license renewal because they have no record of a return. This triggers a "Clean Hands" hold that blocks your renewal and causes delays and late fees.
Why this matters: We've seen this scenario play out countless times. While the Clean Hands issue eventually gets resolved with OTR, it often takes weeks. Meanwhile, you have a deadline to renew your Basic Business License with the Department of Licensing and Consumer Protection (DLCP) - a separate agency. All too often, landlords can't resolve the OTR issue before their DLCP renewal deadline passes, resulting in late penalties on top of the time and frustration dealing with two agencies.
Our recommendation: Speak with your tax professional about filing a zero return showing your rental income was below $12,000. This creates a paper trail with OTR without paying the $100 minimum franchise tax you don't actually owe, and can help you avoid this bureaucratic headache entirely.
Entity-Specific Requirements
If a corporation owns your property, that corporation would file a D-20 (not a D-30).
Aside from the D-30, you may have to file other D.C. returns if you operated as:
- A partnership – file a Form D-65
- A D.C. resident sole proprietor – file a Form D-40
- A D.C. resident trust – file a Form D-41
It's important to talk with your tax professional to determine the specific forms you need to file.
Special Situations
If you sell the property:
Even if there is no tax due, you are required to file a final D-30 when you sell.
What if, for tax purposes, I claim another state as my home state and file taxes there?
Your personal state of residence doesn't matter for D.C. business taxes. In Washington, D.C., rental income is considered business income. If you earn rental income from D.C. property and meet the filing thresholds, you must file a D-30 regardless of where you live or file your personal income taxes. We recommend speaking with your tax professional about how to properly report this D.C. business income on both your D.C. and home state returns.
Other Situations:
As a friendly reminder, RentJiffy is not a tax service or accounting service. You should seek competent advice from your tax professional about this or any other matters related to taxes.