Washington DC Mileage Deduction 2026: Highest Minimum Wage in the U.S.

DC has income tax up to 10.75% and the highest minimum wage in the country at $17.95/hour. For self-employed workers, the high tax rate makes every deductible mile valuable. For W-2 employees, the high minimum wage creates a low threshold for triggering employer reimbursement obligations.

The Savings

At 72.5¢/mile and 15,000 business miles, using a mid-bracket rate of 8.5%:

How to File

Deduct on federal Schedule C, Line 9 at 72.5¢/mile. DC uses your federal adjusted gross income as the starting point, so the deduction flows through to your DC return. Keep a mileage log with the date, destination, purpose, and miles for each trip.

Employer Reimbursement

DC requires reimbursement of "the cost of purchasing any tools required" for the job. This language is narrower than California or Illinois and does not clearly mandate mileage reimbursement. The $17.95/hr minimum wage acts as a practical floor.

FAQ

Does my mileage deduction reduce DC taxes?

Yes. DC uses your federal AGI as the starting point. Your Schedule C mileage deduction reduces that number, which directly reduces your DC tax at rates up to 10.75%.

Does DC require mileage reimbursement?

DC requires reimbursement for "tools required" for the job, but this language is narrower than California or Illinois. It does not clearly mandate mileage reimbursement. The $17.95/hr minimum wage acts as a practical floor.

Can W-2 employees deduct mileage in DC?

No. The mileage deduction for W-2 employees was permanently eliminated under the One Big Beautiful Bill.

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