A major tax disruption is on the horizon for over 300,000 taxpayers in Washington, D.C., as Congress gears up to pass a resolution that would override key parts of the city’s tax code. This move, occurring in the midst of the 2026 tax season, threatens to throw the local tax system into turmoil, affecting thousands of residents, many of whom work in federal positions. The resolution is expected to undo a tax law change that decouples D.C.’s tax code from certain provisions of federal tax law, potentially delaying filings and refunds for many.
The proposed joint resolution, which has already raised concerns among local officials, would have far-reaching consequences for the city’s ability to collect tax revenue. According to Glen Lee, D.C.’s chief financial officer, the disruption would lead to significant delays, potentially pushing income tax filing deadlines well into the fall of 2026. This legislative clash between local and federal authorities has brought up debates over D.C.’s autonomy and the impact on vulnerable populations who rely on expanded tax credits aimed at reducing poverty.
Congress’ Move to Override Local Tax Reforms
At the heart of the controversy is the “D.C. Income and Franchise Tax Conformity and Revision Temporary Amendment Act of 2025,” passed in December 2025. The act aimed to decouple D.C.’s tax code from certain elements of the 2025 federal tax reform package under President Trump’s administration. This decoupling would allow D.C. to implement targeted tax credits, such as the Child Tax Credit and Earned Income Tax Credit, designed to reduce poverty among local families.
However, two resolutions are currently making their way through Congress that would reverse these changes. According to a report by Newsweek, one resolution was introduced in the House of Representatives by Republican Representative Brandon Gill of Texas, and the other in the Senate. These resolutions would force D.C. to align its tax laws with federal tax codes, thereby halting the expansion of critical tax credits. Local officials, including Congresswoman Eleanor Holmes Norton, have criticized this move, calling it “nothing short of administrative and fiscal sabotage,” arguing that it would harm D.C.’s vulnerable populations who benefit from the expanded credits.
The Fallout: Administrative Chaos and Delayed Filings
The potential fallout from this disruption is vast. If the resolution is passed, D.C. tax officials would be forced to revise the tax forms, processing systems, and schedules to conform with federal standards. According to Glen Lee, this change would result in significant delays in the tax filing season, with some estimates suggesting that deadlines could be pushed back until the fall of 2026. Such a delay could lead to confusion among taxpayers, higher error rates in filings, and a backlog of returns, further complicating the city’s tax collection process.
This disruption is particularly concerning given that D.C. tax authorities have already made substantial changes to tax processing systems to implement the new credits. According to local policy experts, these credits have been crucial in reducing child poverty in the city, and reversing them would set back efforts to support low-income working families. Kamolika Das, local policy director for the Institute on Taxation and Economic Policy, described the move as “structural sabotage” of D.C.’s fiscal planning, warning that it would lead to higher inequality and a loss of vital services.
For many D.C. residents, these credits are essential. Bradley Hardy, a professor at Georgetown University, emphasized that local tax credits such as these help families struggling with affordability, particularly those working in low-wage jobs. Hardy and other experts argue that state and local governments should have the flexibility to design their tax systems to best support their populations, without interference from federal mandates.
As the resolution moves forward, the local and national debate over D.C.’s autonomy and its ability to manage its own tax system is far from over. With the legislative clock ticking, both D.C. officials and local residents brace for the potential disruption that could change the way taxes are filed in the nation’s capital.
