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REMOTE EMPLOYEES

Hiring a remote employee in the District of Columbia

Your company is in another state and one employee lives and works from home in the District of Columbia. Which state's taxes apply, unemployment, paid leave and District of Columbia's employer rules, each with its official source.

Facts checked on October 5, 2026 against the official sources listed at the end of this page. For employers. General information, not legal or tax advice: confirm a rule with the agency before you rely on it.

District of Columbia at a glance

Income tax
District of Columbia withholding
Reciprocity
With Maryland and Virginia
Unemployment
$9,000 wage base, 2.7% new employer
Paid leave
DC Paid Family Leave
New hire report
Within 20 days

Which state's taxes apply

Work state
DC taxes its residents' wages, wherever the work is done. Withhold DC income tax on the employee's wages.Source: OTR, Withholding Tax Forms (2026 FR-900Q, FR-900A) (opens in a new tab), checked October 5, 2026; D.C. Code §1-206.02(a)(5) (Home Rule Act: no tax on nonresidents' personal income) (opens in a new tab), checked October 5, 2026
Withholding form
Form D-4Source: OTR, Withholding Tax Forms (D-4 Employee Withholding Allowance Certificate) (opens in a new tab), checked October 5, 2026
Reciprocity
If your office is in Maryland: District of Columbia residents working there are withheld for the District of Columbia, with Form MW507, line 4. If your office is in Virginia: only District of Columbia residents who commute there daily are withheld for the District of Columbia, with Form VA-4, line 3 (condition c); an employee who works from home and comes in on some days is withheld for Virginia on those days.Source: Comptroller of Maryland, Form MW507, Employee's Maryland Withholding Exemption Certificate (2026, PDF) (opens in a new tab), checked October 5, 2026; Virginia Tax, Form VA-4, Employee's Virginia Income Tax Withholding Exemption Certificate (Rev. 04/26, PDF) (opens in a new tab), checked October 5, 2026
Convenience rules
If your company is in Delaware, New York or Pennsylvania, the employee is assigned to an office there and works there on some days, that state taxes the days worked from home in the District of Columbia for the employee's convenience.Source: Delaware Division of Revenue, 2025 Form PIT-NON Instructions, Non-Resident Individual Income Tax Return (PDF) (opens in a new tab), checked October 6, 2026; NYS DTF, TSB-M-06(5)I, New York Tax Treatment of Nonresidents and Part-Year Residents: Application of the Convenience of the Employer Test to Telecommuters and Others (May 15, 2006, PDF) (opens in a new tab), checked October 6, 2026; PA Department of Revenue, PA Personal Income Tax Guide, Gross Compensation (opens in a new tab), checked October 6, 2026
Office days in your company's state
That state's day limit, if it has one, decides whether it withholds on those days: see its page, or the helper below.
An employee from another state working in the District of Columbia
DC never withholds from a nonresident, whatever the days worked in DC.Source: D.C. Code §1-206.02(a)(5) (Home Rule Act: no tax on nonresidents' personal income) (opens in a new tab), checked October 5, 2026

Where to withhold: two states

Pick your company's state, the state where the employee lives and works from home, and the days a year the employee works at your office. The answer reads each state's rules from the data on these pages.

Your company is in
Employee lives and works from home in
Days a year at your office
Assigned to an employer office in New YorkMatters only in the states with a convenience rule (Connecticut, Delaware, New Jersey, New York and Pennsylvania), and only with office days there.

Income tax withholding

  • District of Columbia: all wages.

No New York withholding: the employee does no work in New York.

Unemployment

District of Columbia: the employee works from home there, so the work is localized in the District of Columbia.

Simplified: resident credits, dollar tests, local taxes and a move during the year are not worked out here. Each state's rule and its source are on its page.

Unemployment

The employee works from home in the District of Columbia, so the work is localized in the District of Columbia: pay District of Columbia unemployment tax, not your company state's.

Agency
DC Department of Employment Services (DOES), Office of Unemployment Compensation, Tax DivisionSource: DOES, UI Tax for Employers (opens in a new tab), checked October 5, 2026
Wage base
$9,000 Fixed by lawSource: DOES, Tax Rate Questions (taxable wage base of $9,000 for this calendar year) (opens in a new tab), checked October 5, 2026
New employer rate
2.7% 2.7%, or the average rate of all employers for the prior 12 months ending June 30 if higher; plus a separate 0.2% administrative funding assessment Surcharges not includedSource: DOES, Tax Rate Questions; D.C. Code §51-103(c)(3)(A) and §51-103(m) (opens in a new tab), checked October 5, 2026

Open the account: District of Columbia payroll tax registration

Register before the first payroll: the steps are on District of Columbia payroll tax registration.

District of Columbia employer rules

Employment law applies where the employee works, so these follow the employee into the District of Columbia.

Final pay
Fired: By the next working day after discharge (4 days if the employee handled the employer's money) Quit: By the next regular payday or within 7 days, whichever is earlierSource: D.C. Code §32-1303, Payment of wages upon discharge or resignation (opens in a new tab), checked October 6, 2026
Pay frequency
At least twice a month on regular paydays set in advance, within 10 working days after the period ends; bona fide executive, administrative and professional staff at least once a month.Source: D.C. Code §32-1302, Payment of wages; regular paydays (opens in a new tab), checked October 6, 2026
Pay notice
Written notice at hire and within 30 days of any change: employer name and DBAs, address, phone, rate and basis of pay (incl. tip, meal or lodging allowances and overtime), tip-sharing policy, regular payday. In English, and in the employee's primary language where DOES has a template. Keep a signed and dated copy or an electronic acknowledgment.Source: D.C. Code §32-1008(c)-(d) (Wage Theft Prevention Amendment Act) (opens in a new tab), checked October 5, 2026
New hire reporting
Within 20 days of the start date.Source: D.C. Code §46-226.06(b), Directory of New Hires (opens in a new tab), checked October 5, 2026
E-Verify
No DC E-Verify mandate for private employersSource: Council of the District of Columbia, D.C. Code (full text, publication of 2026-10-02) (opens in a new tab), checked October 5, 2026
Sick leave
Paid sick leave required, from the first employee. 24 or fewer: 1 hour per 87 worked, up to 3 days a year. 25 to 99: 1 hour per 43 worked, up to 5 days a year. 100+: 1 hour per 37 worked, up to 7 days a year.Source: D.C. Code §32-531.02, Accrued Sick and Safe Leave (opens in a new tab), checked October 5, 2026

When the employee moves

Re-check the work state and the registrations before the next payroll: a move changes which state's withholding, unemployment, paid leave and employer rules apply.

Registering your business in the District of Columbia, and whether one remote employee creates tax nexus for your company, are separate questions this page does not cover.

More on the District of Columbia

WORKLIO HCM

Payroll for employees who work from home in another state

Worklio HCM withholds by home and work state, reciprocity included, and handles city and county taxes. We help open state withholding and unemployment accounts when you hire somewhere new, and our registration service can register your employer tax accounts for you. Taxes are calculated, deposited and filed in every state and locality, and when an agency notice arrives, you upload it and our tax team resolves it. State paid leave contributions are withheld, too.

Remote employees in other states

Sources

The agency page or document behind each fact, as checked.

General information, not legal or tax advice. Rules change; confirm current requirements with the relevant agency or your advisor. You remain responsible for your employment taxes and for each state's rules.

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