District of Columbia · Student Loan Interest Deduction
Student Loan Interest Deduction in District of Columbia (2026)
Deduct up to $2,500 of student loan interest regardless of whether you itemize. District of Columbia has a progressive income tax with a top rate of 10.75%, so a District of Columbia filer's combined marginal rate on the next dollar at $101,722 of income is about 30.5% (22% federal + 8.5% DC).
2026 savings example for District of Columbia
Planning estimate for a single filer earning $101,722 (District of Columbia median household income in LevyIO's state dataset) who removes $2,500 from taxable income. Federal tax uses the 2026 IRS brackets after the $16,100 standard deduction; DC tax uses the state brackets in LevyIO's dataset and assumes the state follows the federal treatment.
Estimated total savings
$763
Federal savings
$550
$13,549 → $12,999 · 22% bracket
DC state savings
$213
$5,805 → $5,593 · 8.5% marginal
Combined marginal rate
30.5%
≈ $305 saved per $1,000 deducted
Statutory maximum for this item in LevyIO's dataset: $2,500.
Federal × District of Columbia marginal rates (2026, single)
Gross-income ranges include the federal standard deduction. The DC column is the state marginal rate at the midpoint of each range. The last column is the tax saved per $1,000 deducted at that combined rate.
| Federal bracket | Gross income (single) | DC marginal | Combined | Per $1,000 |
|---|---|---|---|---|
| 10% | $16,100 - $28,500 | 4% | 14% | $140 |
| 12% | $28,500 - $66,500 | 6% | 18% | $180 |
| 22% | $66,500 - $121,800 | 8.5% | 30.5% | $305 |
| 24% | $121,800 - $217,875 | 8.5% | 32.5% | $325 |
| 32% | $217,875 - $272,325 | 8.5% | 40.5% | $405 |
| 35% | $272,325 - $656,700 | 9.25% | 44.25% | $443 |
| 37% | Over $656,700 | 9.75% | 46.75% | $468 |
Eligibility & forms
Borrowers paying interest on qualified student loans
- Up to $2,500 per year
- MAGI under $90K single/$185K married
- Cannot be claimed as dependent
Federal forms: Form 1098-E, Form 1040
District of Columbia filing notes
DC uses the federal standard deduction. The 10.75% top rate affects income over $1M. DC offers an EITC at 70% of federal. Check reciprocity with MD and VA.
Common mistakes: Exceeding income limits; Not checking all loan types.
Frequently asked questions
How much can the Student Loan Interest Deduction save a District of Columbia taxpayer in 2026?
In LevyIO's example, a single filer with $101,722 of income (the District of Columbia median household income in our state dataset) who removes $2,500 from taxable income saves about $550 in 2026 federal tax (22% marginal bracket) plus about $213 in District of Columbia tax (8.5% state marginal rate), roughly $763 combined. It is a planning estimate computed from the 2026 IRS brackets and LevyIO's DC bracket data, not a survey figure.
What is the District of Columbia income tax rate for 2026?
District of Columbia has a progressive income tax with a top rate of 10.75%. The DC standard deduction in LevyIO's dataset is $14,600 single / $29,200 married. High top rate (10.75%). Uses federal standard deduction. Estate tax ($4.71M exemption). Highest median income.
Who qualifies for the Student Loan Interest Deduction in District of Columbia?
Borrowers paying interest on qualified student loans. The federal rules are the same in every state; the requirements are: Up to $2,500 per year; MAGI under $90K single/$185K married; Cannot be claimed as dependent. District of Columbia filers should confirm on the DC return whether the state follows the federal treatment.
Which forms do I file to claim the Student Loan Interest Deduction?
Federal: Form 1098-E, Form 1040. District of Columbia: check the DC Office of Tax and Revenue instructions for the matching state schedule. Common mistakes: Exceeding income limits; Not checking all loan types.
Student Loan Interest Deduction in other states
More District of Columbia deductions and credits
- District of Columbia income tax guide 2026
- Backdoor Roth IRA Conversion in District of Columbia
- Child & Dependent Care Credit in District of Columbia
- Qualified Charitable Distribution (QCD) in District of Columbia
- Rental Real Estate Safe Harbor (QBI) in District of Columbia
- State Income Tax Deduction in District of Columbia
Sources
Reviewed 2026-09-17. Estimates are educational planning figures computed from the IRS 2026 inflation adjustments and LevyIO's state bracket dataset; they are not tax advice.