Tax residency rules, audits, and the severance record (2026)
2026.1 Edition · Revised 2026-07-25 · DomusDay Research
Moving out of Washington, DC is easy. Stopping Washington, DC taxes is a different act, and it happens on paper: Washington, DC keeps treating you as a resident until the record shows otherwise.
On the burden of showing otherwise: The departing individual carries it. Murphy: “If one has at any time become domiciled here, it is his burden to establish any change of status upon which he relies to escape the tax”. The standard is physical presence in the new jurisdiction together with an intent to abandon the District and remain elsewhere indefinitely.
Two tests decide it. Cross 183 days with a Washington, DC abode still available and you are taxed as a resident regardless of where you claim to live — and see day-counting rules. Or keep the day count clean but leave the life-pattern evidence pointing at Washington, DC, and domicile does the same work. Everything on this page exists to answer one question: if OTR asks, does your record hold?
Section 602(a)(5) of the Home Rule Act forbids the Council from imposing any tax on the personal income of a non-resident, either directly or at the source. The source-income tail that follows a departing New York or California resident has no statutory basis in the District.
Source ↗Section 47-1801.04(42) reaches every individual domiciled in the District at any time during the taxable year. The date domicile changes therefore decides the year's filing posture, and a late-year move does not avoid a part-year resident return.
Source ↗An owner whose property stops qualifying as a homestead notifies the Mayor within 30 days. Without that notice the deduction is rescinded without limitation for each tax year, with penalty and interest from the day the correct tax was due.
Source ↗The 8.25% unincorporated business franchise tax reaches the business on its District income rather than the owner on their personal income, so a move away does not end it.
Source ↗This is the test with a number in it, and the number is what an auditor can verify line by line. Keep any Washington, DC dwelling suitable for year-round use and spend more than 183 days in the state, and Washington, DC taxes all of your income — domicile arguments never enter into it. See day-counting rules: a morning meeting, a connection through the city with a dinner on the ground, a single evening — each is a full day against the threshold.
The abode count is the second of two independent prongs. The first reaches anyone domiciled in the District at any time during the taxable year — a single day of domicile inside the year is enough to make the year a resident year, which is why the date domicile changes carries more weight here than a day count does.
A place of abode maintained within the District for an aggregate of 183 days or more during the taxable year makes an individual a resident whether or not they are domiciled in the District. The statute counts days of abode in the aggregate and does not define how a partial day is treated, so the record carries no partial-day rule rather than inferring one.
Selling the apartment is not the test, and neither is the new driver's license. Washington, DC presumes an established domicile continues until it is shown to have changed — physical presence in the new jurisdiction together with an intent to abandon the District and remain elsewhere indefinitely. On the burden: The departing individual carries it. Murphy: “If one has at any time become domiciled here, it is his burden to establish any change of status upon which he relies to escape the tax.” Examiners weigh 4 primary factors — where the individual votes and is registered, the character of the district residence, where the family lives, where financial investments and property are held — and they weigh what you did, not what you intended. The pattern of an actual life somewhere else is the evidence; everything else is secondary.
A clean exit does not end every Washington, DC claim. These rules keep taxing specific situations after the move — each one is a way the state stays in your return.
AffectsFormer residents who keep a sole proprietorship, partnership or other unincorporated business with District operations or District-sourced receipts after moving away.
Office of Tax and Revenue (OTR) runs a moderate-intensity residency program. OTR publishes no residency-audit volume or yield statistics, so the record carries none. The two statutory prongs are documentary rather than intent-heavy: the date domicile changed, and days of abode. An examination is not an argument about intentions — it is a request for documents, and the request looks like this:
Every item on that list either exists in your records from the year of the move, or it does not. That is the whole game — and why the severance record below is the section that matters most.
An audit years from now is answered with documents generated in the months around the move. This is that inventory — grouped the way examiners think about a life, each item paired with the evidence it leaves behind.
The date domicile changes does more work in the District than a day count does. Because § 47-1801.04(42) reaches anyone domiciled in the District at any time during the taxable year, there is no partial-year escape from resident status through domicile — the year of the move is a part-year resident year on the domicile prong however late in the year the move falls. The 183-day abode prong runs independently: a person who has given up District domicile but keeps a place of abode there can be pulled back to resident status on days alone. What does not arise is a source-income tail, since the Home Rule Act bars the District from taxing a non-resident's personal income even at the source.
The District driver licence is surrendered in the course of obtaining a licence in the new jurisdiction, which records the surrender and its date.
Source ↗Vehicles registered in the District are re-registered in the new jurisdiction, and the District registration and residential parking permit end.
Source ↗An owner whose District property no longer qualifies as a homestead notifies the Mayor of the date of the change in eligibility within 30 days after the change.
§ 47-850.02(b)(1) rescinds the deduction without limitation for each affected tax year where notice is not given, and adds penalty and interest from the day the correct tax was due. The 30-day notice is the cheapest dated record a departing District homeowner can generate.
Source ↗The homestead deduction is available only to an individual domiciled in the District who owns and occupies the property as their principal residence, so a change of domicile ends eligibility.
D.C. Code § 47-849. The assessment cap credit under § 47-864 travels with the homestead and ends with it.
Source ↗The date a District residence is sold, or the date a lease ends, fixes the point at which a place of abode stopped being maintained for the 183-day count.
Source ↗An individual who is not a District resident files Form D-4A, Certificate of Nonresidence in the District of Columbia, with their employer, who keeps it on file; District withholding stops on that basis.
The form states the permanent address outside the District and certifies that the filer does not reside in the District for 183 days or more in the year. It matters more here than the equivalent form elsewhere: because the Home Rule Act bars the District from taxing non-resident income at all, a former resident who keeps a District job owes nothing to the District on those wages.
Source ↗Bank, brokerage and retirement account records are updated to the new address, and any deposit box held at a District branch is closed.
Source ↗District professional licences and registrations are surrendered, converted to a non-resident status, or maintained deliberately where the practice continues.
A licence kept without a District practice is one of the affiliations Murphy weighs; a licence kept because the practice continues in the District is an ordinary business fact.
Source ↗Treating physicians, dentists and other practitioners are changed to the new jurisdiction, generating dated first-visit records there.
Source ↗District voter registration is cancelled or superseded by registration in the new jurisdiction; Murphy treats where a person votes as highly relevant to domicile though not controlling.
Source ↗Congregation, club and professional-body memberships are transferred or ended; Murphy lists church, club and professional affiliations among the circumstances weighed.
Source ↗Household goods and the items of personal significance are moved out of the District, and the mover's documentation records the date and the destination.
Source ↗A part-year District resident files the D-40 for the year of the move, reporting the resident-period income and prorating deductions to the period of residence.
The D-40 booklet's Calculation D covers itemized deductions for part-year residents, and contributions are deductible only in the amount made while resident in the District.
Source ↗A non-resident from whom District tax was withheld in error, or who made District estimated payments in error, requests the amount back on Form D-40B.
The D-40B is a refund request rather than a nonresident income tax return, because the District has no nonresident income tax to compute.
Source ↗An unincorporated business with District operations continues to file and pay the franchise tax on its District income after the owner ceases to be a resident.
§ 47-1808.03(a)(8) sets the rate at 8.25% for every unincorporated business, domestic or foreign.
Source ↗Every rule on this page traces to one of these. When a blog and a statute disagree, the statute wins — start here.
How these are chosen, what the automated gates catch, and what this site deliberately does not do: how these guides are made →
The year of the move is filed on D-40, with income split between the resident and nonresident periods — and that return is itself evidence: it states your change date on a signed document. District withholding stops once the employer holds a Form D-4A certifying non-residence. Where withholding continued after the move, the D-40B is the route back to it.
Not your personal income. Section 602(a)(5) of the Home Rule Act forbids the Council from imposing any tax on the personal income of a non-resident, either directly or at the source. An unincorporated business you own that keeps District operations is separate: the 8.25% franchise tax reaches the business on its District income regardless of where you live.
The 183-day prong turns on maintaining a place of abode in the District for an aggregate of 183 days or more in the taxable year, and applies whether or not you are domiciled there. The statute counts days in the aggregate and does not define how a partial day is treated. The domicile prong is separate and has no day count at all.
On the domicile prong, yes — § 47-1801.04(42) reaches anyone domiciled in the District at any time during the taxable year, so the year of the move is a part-year resident year however late the move falls. The part-year return is the D-40, with deductions prorated to the period of residence.
You do. In District of Columbia v. Murphy the Supreme Court put it directly: if one has at any time become domiciled in the District, it is that person's burden to establish any change of status relied on to escape the tax. Showing the change means physical presence in the new jurisdiction together with an intent to abandon the District and remain elsewhere indefinitely.
Form D-4A, the Certificate of Nonresidence in the District of Columbia, is filed with the employer, who keeps it on file, and District withholding stops on that basis. Where District tax was withheld after the move, Form D-40B requests it back; it is a refund request rather than a nonresident return, because there is no nonresident income tax to compute.
Eligibility ends with domicile, since the deduction is available only to an individual domiciled in the District who owns and occupies the property as their principal residence. The change in eligibility is notified within 30 days; without that notice the deduction is rescinded without limitation for each tax year, with penalty and interest added from the day the correct tax was due.
Three years after a return is filed, six where the return omits gross income exceeding 25% of the amount stated, and without limit where no return was filed at all.
2026.1 Edition · Revised 2026-07-25 · DomusDay Research