If you’ve dutifully started collecting all the pay stubs and receipts you need to pay your D.C. taxes, hold off for just a second more: Congressional Republicans may be about to make your life much more complicated.
A resolution rapidly making its way through both the House and Senate this week could repeal a bill passed by the D.C. Council last year that changed the local tax code in an attempt to protect revenues from Republican cuts — and it could impact your taxes this year.
Should the resolution clear both Republican-led chambers and be signed by President Donald Trump, D.C. officials diplomatically say it could create “huge administrative challenges,” push tax-filing deadlines all the way into the fall, potentially deprive the city of almost $700 million in revenue, and eliminate a pair of tax credits for low-income residents and families. Less diplomatically, Rep. James Walkinshaw (D-Virginia) says the Republican bill would “create chaos.”
The target of Republicans’ ire is a bill passed by the council last November. The bill “decoupled” D.C.’s local tax code from specific provisions of the federal tax code, in large part to spare the city from an expected loss of revenue that would come from Trump’s massive tax-cut passage known as the One Big Beautiful Bill Act. The 13 provisions that were set to take effect for the 2025 tax year — including no taxes on some tips and overtime, but also business-friendly tax cuts — would have cost D.C. some $600 million in revenue.
By decoupling, D.C. lawmakers said they could reclaim that money for local purposes. Specifically, they aim to expand the local match of the Earned-Income Tax Credit that benefits working-class residents, and create a local version of the Child Tax Credit targeting families in the city.
But congressional Republicans argue that decoupling is an affront to Trump’s tax-cut bill, and would deny residents some of its benefits.
“The council’s approach would rob D.C. residents of new tax cuts, thereby increasing taxes on families, seniors, and small businesses,” said Rep. Virginia Foxx (R-North Carolina) on Monday. “By passing this disapproval, we can strike down Democrat-imposed tax hikes that are punishing their citizens when other Americans are granted the tax cuts.”
“They’re preventing D.C. residents from experiencing the full benefits of [the Republican] tax bill. It’s almost unimaginable that they would inflict this pain on their own constituents, but that’s what they’re doing,” said Speaker of the House Mike Johnson on Tuesday.
The Republican bill would “disapprove” the council’s bill, effectively repealing it. While D.C. has a locally elected legislature that crafts the city’s laws, everything that city lawmakers pass is sent to Congress for a 30-day review during which disapproval resolutions can be introduced. They have only been successfully used a handful of times in the five decades that D.C. has had home rule, but they have been introduced with more frequency in recent years — largely targeting the city’s criminal justice laws.
There has never been a disapproval resolution specifically aimed at a local budget or tax law. And the one currently being debated on Capitol Hill has sparked significant concern amongst D.C. officials, in large part because of the timing.
In a letter sent to congressional leaders on Monday, D.C. Chief Financial Officer Glen Lee said the resolution’s passage would come just as D.C. residents and businesses have started filing their taxes under rules linked to the council’s decoupling bill. If those rules were suddenly changed by Congress, Lee said he “would need to suspend the current filing season” to update tax forms and guidance — a process that would take months.
Mayor Muriel Bowser and Council Chairman Phil Mendelson similarly shared those concerns in their own letter to Congress on Monday.
“The District is already a month into the 2026 tax year and has begun accepting and processing tax returns,” they wrote. “Disapproval at this stage would create huge administrative challenges, require taxpayers to re-file their taxes, render existing guidance and forms obsolete, and necessitate rapid mid-year changes to tax administration systems. It is unclear how quickly commercial tax preparation software could be updated to accommodate such changes, and District residents and businesses would likely experience confusion, as well as delays.”
In her own statement, D.C. Del. Eleanor Holmes Norton said the Republican resolution would be “nothing short of deliberate administrative and fiscal sabotage of the nation’s capital.” Fellow congressional Democrats argued that the move could threaten the city’s credit rating — which was slightly downgraded during last year’s budget snafu — dinging a city that has otherwise had balanced budgets for more than two decades.
“You’re coming here not knowing the first thing about D.C.’s budget process and fiscal situation, and Republicans in Congress think they know better than D.C.’s elected officials about these very technical local tax and budget decisions,” said Rep. Jim McGovern (D-Massachusetts) to his Republican colleagues during a committee debate on Monday evening. “But blowing a huge hole in their budget? Seriously? You guys can’t even manage the federal budget, which is your actual job.”
D.C. lawmakers have also raised another concern: the fate of their expansion of the Earned-Income Tax Credit and the new Child Tax Credit, both of which would be eliminated if the repeal succeeds. “We made policy choices … to put money back into the pockets of working-class families. What the congressional action would do is cost those families money,” said Ward 6 Councilmember Charles Allen on Wednesday morning.
“Together, the new and expanded credits are projected to reduce child poverty by 20 percent, with most of the gains going to households earning less than $61,000 annually. Repealing these crucial supports would be particularly harmful now with the D.C. economy ‘teetering toward recession,’ due in part to the substantial layoffs of federal workers and the affordability challenges low- and moderate-income families in D.C. are facing,” wrote the Center on Budget and Policy Priorities.
Beyond all of this, many D.C. officials and advocates are frustrated that Republicans are picking on the city simply because they can. At least a dozen states have passed decoupling bills of their own, including some that have Republicans representatives in Congress. “If you want to micromanage the District of Columbia, the best thing to do is run for mayor or city council,” said Walkinshaw to Republicans on Monday.
For now, though, D.C. officials are fine-tuning their talking points to focus on the potential chaos and confusion that could occur for local residents and businesses who want to pay their taxes. “Come April 15 you can file your federal taxes, but not your local taxes,” warned At-Large Councilmember Christina Henderson if the Republican resolution passes.
The House is expected to vote on the resolution on Wednesday; Democrats have been urged to vote against it in bloc. A Senate committee is scheduled to hold a hearing on the measure the same day, and it could quickly proceed to a floor vote at some point later in the week or next week. D.C. officials are pushing more aggressively on the Senate side, hoping to sway a number of Republicans that sparking tax-filing chaos in D.C. isn’t worth it.
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