Washington, DC Tax-Equivalent Yield Calculator (2026)
DC rules have changed. Find the yield required to match a DC-issued municipal bond.
Locked to Washington, DC
Defaults to top marginal bracket. Advanced users may edit or change.
Tax-Equivalent Yield
To match a 3.50% tax-free yield, a taxable bond must pay 7.22%.
Tax efficiency applies to both income and capital gains.If you are optimizing after-tax bond income, you may also benefit from reviewing ETF correlation data for tax-loss harvesting.
Estimates based on projected 2026 marginal tax brackets. Assumes in-state municipal bond (exempt from Federal & State tax). Consult a tax professional for specific advice.
TaxLossPairs.comMacro Tax Perspective: The Reciprocity Trap
DC’s repeal of universal tax-exemption for out-of-state bonds means residents can no longer "muni-shop" across the nation tax-free.
Residents must now focus specifically on DC-issued debt or regional authorities to capture the full 10.75% local tax benefit.
Local Tax FAQs
How is the DC tax rate in this calculator determined?
We use the top marginal rate of 10.75% for taxable income exceeding $1 million.
Do I pay DC tax on municipal bonds from other states?
Yes. DC repealed its universal exemption; interest from MD or VA bonds is now generally taxable for DC residents.
How does the 2026 SALT cap affect DC muni bond savings?
The federal cap rose to $40,400 but phases down for high earners, keeping DC tax avoidance a high priority for investors.
Which bonds ARE tax-free for DC?
Only bonds specifically issued by the District of Columbia or certain regional authorities like WMATA.
Compare Other Jurisdictions
Optimize Your Capital Gains
High earners often pair tax-free income with strategic loss harvesting. Have realized losses? Use our decision engine to check if you should harvest.