diff --git a/changelog.d/fix-dc-se-loss-addition-filers.fixed.md b/changelog.d/fix-dc-se-loss-addition-filers.fixed.md
new file mode 100644
index 00000000000..472993f35fa
--- /dev/null
+++ b/changelog.d/fix-dc-se-loss-addition-filers.fixed.md
@@ -0,0 +1 @@
+D.C.'s self-employment loss addition no longer counts a dependent's self-employment loss, either in the amount added back or in its split between spouses.
diff --git a/policyengine_us/tests/core/test_dc_self_employment_loss_addition_invariants.py b/policyengine_us/tests/core/test_dc_self_employment_loss_addition_invariants.py
new file mode 100644
index 00000000000..687a20c3a84
--- /dev/null
+++ b/policyengine_us/tests/core/test_dc_self_employment_loss_addition_invariants.py
@@ -0,0 +1,148 @@
+"""Invariants for the D.C. self-employment loss addition.
+
+The addition adds back the filers' self-employment losses deducted in federal
+AGI above D.C.'s $12,000 threshold (Schedule I, Calculation A, line 6). A
+tax-unit dependent's losses belong on the dependent's own return and are not in
+`loss_ald`, so they must not enter the addition or its split between spouses.
+
+The properties must hold for every tax unit, so the tests draw a seeded random
+population of D.C. tax units (single, head of household, joint, joint with
+dependents). Filers have wages, and self-employment and rental income of
+either sign; dependents have self-employment income of either sign. The tests
+run it twice as vectorized simulations: as drawn, and with the dependents'
+self-employment income set to zero. Losses stay far below the section 461(l)
+limit, so every filer loss is deducted in federal AGI.
+
+1. Dependents' self-employment income never changes anyone's addition.
+2. Dependents get no addition, and no addition is negative.
+3. The tax unit's addition is the head's and spouse's self-employment losses
+   less $12,000, and never less than zero. A filer's rental loss and a
+   dependent's loss leave it unchanged.
+4. A joint return splits the addition between the spouses in proportion to
+   their own losses.
+"""
+
+import numpy as np
+import pytest
+
+from policyengine_us import Simulation
+
+YEAR = 2025
+N_RANDOM = 200
+SEED = 20261006
+THRESHOLD = 12_000
+TOLERANCE = 0.02  # dollars; float32 sums
+
+
+def _self_employment(rng, low, high):
+    return float(round(rng.choice([0.0, rng.uniform(low, 0), rng.uniform(0, high)])))
+
+
+def _situation(zero_dependents=False):
+    rng = np.random.default_rng(SEED)
+    people, tax_units, households = {}, {}, {}
+    for i in range(N_RANDOM):
+        kind = rng.choice(
+            ["single", "hoh", "joint", "joint_dependents"], p=[0.15, 0.2, 0.2, 0.45]
+        )
+        roles = ["head", "spouse"] if kind.startswith("joint") else ["head"]
+        members = []
+        for role in roles:
+            name = f"{role}_{i}"
+            members.append(name)
+            people[name] = {
+                "age": {YEAR: 45},
+                "employment_income": {YEAR: float(round(rng.uniform(0, 150_000)))},
+                "self_employment_income": {
+                    YEAR: _self_employment(rng, -60_000, 40_000)
+                },
+                "rental_income": {YEAR: _self_employment(rng, -40_000, 30_000)},
+                f"is_tax_unit_{role}": {YEAR: True},
+            }
+        if kind in ("hoh", "joint_dependents"):
+            for j in range(int(rng.integers(1, 3))):
+                name = f"child_{i}_{j}"
+                members.append(name)
+                amount = _self_employment(rng, -40_000, 20_000)
+                people[name] = {
+                    "age": {YEAR: 16 + j},
+                    "is_tax_unit_dependent": {YEAR: True},
+                    "self_employment_income": {
+                        YEAR: 0.0 if zero_dependents else amount
+                    },
+                }
+        tax_units[f"tu_{i}"] = {"members": members}
+        households[f"hh_{i}"] = {"members": members, "state_code": {YEAR: "DC"}}
+    return {"people": people, "tax_units": tax_units, "households": households}
+
+
+@pytest.fixture(scope="module")
+def run():
+    out = {}
+    for name, zero_dependents in {"with": False, "without": True}.items():
+        sim = Simulation(situation=_situation(zero_dependents=zero_dependents))
+        out[name] = np.asarray(
+            sim.calculate("dc_self_employment_loss_addition", YEAR), dtype=float
+        )
+        if name == "with":
+            for variable in [
+                "total_self_employment_income",
+                "is_tax_unit_dependent",
+                "is_tax_unit_spouse",
+            ]:
+                out[variable] = np.asarray(sim.calculate(variable, YEAR))
+            out["joint"] = (
+                sim.calculate("filing_status", YEAR).decode_to_str() == "JOINT"
+            )
+            out["person_tax_unit"] = sim.populations["tax_unit"].members_entity_id
+    return out
+
+
+def _unit_sum(run, values):
+    return np.bincount(
+        run["person_tax_unit"], weights=values, minlength=len(run["joint"])
+    )
+
+
+def test_population_has_dependent_losses_and_additions(run):
+    dependent = run["is_tax_unit_dependent"]
+    dependent_loss = _unit_sum(
+        run, dependent * (run["total_self_employment_income"] < 0)
+    )
+    added = _unit_sum(run, run["with"]) > 0
+    assert ((dependent_loss > 0) & added & run["joint"]).sum() > 5
+
+
+def test_dependents_income_never_changes_the_addition(run):
+    np.testing.assert_allclose(run["with"], run["without"], atol=TOLERANCE)
+
+
+def test_dependents_get_nothing_and_nothing_is_negative(run):
+    assert np.all(run["with"][run["is_tax_unit_dependent"]] == 0)
+    assert np.all(run["with"] >= 0)
+
+
+def _filer_loss(run):
+    loss = np.maximum(0, -run["total_self_employment_income"])
+    return loss * ~run["is_tax_unit_dependent"]
+
+
+def test_addition_is_filers_losses_over_threshold(run):
+    expected = np.maximum(0, _unit_sum(run, _filer_loss(run)) - THRESHOLD)
+    np.testing.assert_allclose(_unit_sum(run, run["with"]), expected, atol=TOLERANCE)
+
+
+def test_joint_split_follows_each_spouses_loss(run):
+    filer_loss = _filer_loss(run)
+    unit = run["person_tax_unit"]
+    unit_loss = _unit_sum(run, filer_loss)[unit]
+    unit_addition = np.maximum(0, unit_loss - THRESHOLD)
+    share = np.divide(
+        filer_loss, unit_loss, out=np.zeros_like(filer_loss), where=unit_loss > 0
+    )
+    joint_filer = ~run["is_tax_unit_dependent"] & run["joint"][unit]
+    np.testing.assert_allclose(
+        run["with"][joint_filer],
+        (share * unit_addition)[joint_filer],
+        atol=TOLERANCE,
+    )
diff --git a/policyengine_us/tests/policy/baseline/gov/states/dc/tax/income/dc_self_employment_loss_addition.yaml b/policyengine_us/tests/policy/baseline/gov/states/dc/tax/income/dc_self_employment_loss_addition.yaml
index 8ed948a57f6..8ff19166598 100644
--- a/policyengine_us/tests/policy/baseline/gov/states/dc/tax/income/dc_self_employment_loss_addition.yaml
+++ b/policyengine_us/tests/policy/baseline/gov/states/dc/tax/income/dc_self_employment_loss_addition.yaml
@@ -10,6 +10,91 @@
     dc_self_employment_loss_addition: 8_000
     dc_agi: 68_000
 
+- name: A dependent's self-employment loss does not dilute the head's addition.
+  absolute_error_margin: 0.01
+  period: 2024
+  input:
+    people:
+      head:
+        age: 45
+        employment_income: 60_000
+        self_employment_income: -20_000
+      spouse:
+        age: 45
+        employment_income: 40_000
+      dependent:
+        age: 17
+        is_tax_unit_dependent: true
+        self_employment_income: -20_000
+    tax_units:
+      tax_unit:
+        members: [head, spouse, dependent]
+    households:
+      household:
+        members: [head, spouse, dependent]
+        state_code: DC
+  output:
+    # The dependent's loss is on their own return, so loss_ald holds only
+    # the head's $20,000. Addition: max(0, 20,000 - 12,000) = 8,000, all
+    # of it the head's.
+    dc_self_employment_loss_addition: [8_000, 0, 0]
+
+- name: A dependent's self-employment loss does not raise a head of household's addition.
+  absolute_error_margin: 0.01
+  period: 2024
+  input:
+    people:
+      head:
+        age: 45
+        employment_income: 60_000
+        self_employment_income: -5_000
+        rental_income: -30_000
+      dependent:
+        age: 17
+        is_tax_unit_dependent: true
+        self_employment_income: -20_000
+    tax_units:
+      tax_unit:
+        members: [head, dependent]
+    households:
+      household:
+        members: [head, dependent]
+        state_code: DC
+  output:
+    # The head's own self-employment loss is $5,000, under the $12,000
+    # threshold. Counting the dependent's $20,000 would give
+    # min(25,000, 35,000 of business losses in loss_ald) - 12,000 = 13,000.
+    dc_self_employment_loss_addition: [0, 0]
+
+- name: Both spouses' losses share the addition; a dependent's loss is left out.
+  absolute_error_margin: 0.01
+  period: 2024
+  input:
+    people:
+      head:
+        age: 45
+        employment_income: 60_000
+        self_employment_income: -20_000
+      spouse:
+        age: 45
+        employment_income: 50_000
+        self_employment_income: -10_000
+      dependent:
+        age: 17
+        is_tax_unit_dependent: true
+        self_employment_income: -15_000
+    tax_units:
+      tax_unit:
+        members: [head, spouse, dependent]
+    households:
+      household:
+        members: [head, spouse, dependent]
+        state_code: DC
+  output:
+    # Addition: max(0, 30,000 - 12,000) = 18,000, split 20:10 by the
+    # spouses' own losses.
+    dc_self_employment_loss_addition: [12_000, 6_000, 0]
+
 - name: Case 3, large SE loss capped by federal 461(l).
   absolute_error_margin: 0.01
   period: 2024
diff --git a/policyengine_us/variables/gov/states/dc/tax/income/additions/dc_self_employment_loss_addition.py b/policyengine_us/variables/gov/states/dc/tax/income/additions/dc_self_employment_loss_addition.py
index 9348a9f1b1e..08bf9789851 100644
--- a/policyengine_us/variables/gov/states/dc/tax/income/additions/dc_self_employment_loss_addition.py
+++ b/policyengine_us/variables/gov/states/dc/tax/income/additions/dc_self_employment_loss_addition.py
@@ -14,18 +14,25 @@ class dc_self_employment_loss_addition(Variable):
     defined_for = StateCode.DC
 
     def formula(person, period, parameters):
-        loss_person = max_(0, -person("total_self_employment_income", period))
+        # Only the head's and spouse's losses are on this return. A tax-unit
+        # dependent's losses are not in loss_ald, so counting them would raise
+        # the addition or dilute the filers' shares of it.
+        is_head_or_spouse = person("is_tax_unit_head_or_spouse", period)
+        loss_person = is_head_or_spouse * max_(
+            0, -person("total_self_employment_income", period)
+        )
         loss_taxunit = person.tax_unit.sum(loss_person)
-        # Cap at SE loss actually deducted in federal AGI via loss_ald.
-        # loss_ald includes both SE and capital losses; isolate SE portion.
+        # Cap at the business losses actually deducted in federal AGI: loss_ald
+        # less its capital loss parts (self-employment, farm, rental,
+        # partnership, estate and other business losses after section 461(l)).
         loss_ald = person.tax_unit("loss_ald", period)
         capital_loss_in_ald = add(
             person.tax_unit,
             period,
             ["capital_losses_allowed_against_gains", "limited_capital_loss"],
         )
-        se_loss_in_ald = max_(0, loss_ald - capital_loss_in_ald)
-        effective_loss = min_(loss_taxunit, se_loss_in_ald)
+        business_loss_in_ald = max_(0, loss_ald - capital_loss_in_ald)
+        effective_loss = min_(loss_taxunit, business_loss_in_ald)
         p = parameters(period).gov.states.dc.tax.income.additions
         addition_taxunit = max_(0, effective_loss - p.self_employment_loss.threshold)
         # allocate taxunit addition in proportion to head and spouse losses
@@ -35,6 +42,4 @@ def formula(person, period, parameters):
         mask = loss_taxunit > 0
         loss_fraction[mask] = loss_person[mask] / loss_taxunit[mask]
         addition_fraction = where(is_joint, loss_fraction, 1)
-        is_head = person("is_tax_unit_head", period)
-        is_spouse = person("is_tax_unit_spouse", period)
-        return (is_head | is_spouse) * addition_taxunit * addition_fraction
+        return is_head_or_spouse * addition_taxunit * addition_fraction