Tax reporting for DC LLC’s, Partnerships & Corporations

LLC’s,  Partnerships and Sole Proprietorships subject to DC Franchise tax file an unincorporated franchise tax return (form D-30). DC resident owners, partners or members can subtract on their personal DC returns any income that is also taxed on a DC franchise tax return. Non DC owners, partners or members may be able to take a credit for DC franchise taxes paid on their state returns depending on their state of residence.

DC based LLC’s and Partnerships not subject to DC franchise tax are required to file a DC partnership tax return (form D-65) instead. There is no tax due with this return, but it’s an opportunity for DC to take a closer look at your business to see if you may actually be subject to franchise tax – they will look at the 80% test very closely on these returns.

DC based Sole Proprietorships not subject to DC Franchise tax are not required to file any additional DC franchise or income tax returns beyond what would be reported on their personal DC or state tax returns.

Tax reporting for DC Corporations & S-Corps

Corporations (including S-Corps) subject to DC Franchise tax must file a Corporation franchise tax return (form D-20). DC resident S-Corp shareholders can deduct on their personal DC returns any income also taxed on a DC franchise tax return. Non DC S-Corp shareholders may be able to take a credit for DC franchise taxes paid on their state returns depending on their state of residence.