Pass-Through Entities Income Tax and Tax Credit on Certain S Corporations and Partnerships Amendment Act of 2025

This bill allows certain S corporations and partnerships (pass-through entities) in Washington D.C. to choose whether to pay District income tax at the entity level or have it paid on behalf of nonresident members. It directly affects S corporations, partnerships, limited liability companies, and business trusts operating in D.C. The key mechanism lets entities elect to pay tax on their D.C.-derived income as a single entity (instead of members paying individually) or pay tax on behalf of nonresident members. Tax rates would apply to the entity's taxable income attributable to D.C. business, using the District's top individual and corporate tax rates.