🇺🇸 Alaska Income Tax — 2026 UPDATE

Alaska Income Tax Rates & Brackets (Tax Year 2025 — Filed in 2026)

⚠️Informational only — not legal or tax advice.

Tax year covered: 2025 (returns filed in 2026)
Applies to: Income earned January 1 – December 31, 2025
Last verified: February 19, 2026

Alaska State Income Tax

Table of Contents

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Quick Reference

Does Alaska have a state income tax? No
Tax structure: None (no individual income tax)
State income tax rate: 0%
Standard deduction: N/A
Personal exemption: N/A
Local income tax: No
Statewide sales tax: No
Local sales tax: Yes — select municipalities (1%–7%)
State return required? No individual state income tax return
Official source: https://tax.alaska.gov

Key Takeaways

  • Alaska has no individual state income tax. Alaska residents pay no state income tax on wages, salaries, retirement income, investment income, Social Security benefits, or any other form of personal income.
  • No state return to file. There is no Alaska individual income tax return form. Residents only file a federal return with the IRS.
  • Unique benefit — Permanent Fund Dividend (PFD): Alaska annually distributes a cash dividend to eligible residents from the state’s oil wealth. The 2025 PFD amount is $1,000 per eligible resident. The PFD is not taxable by Alaska (no state income tax), but is taxable at the federal level.
  • No statewide sales tax. Alaska is one of five states with no statewide sales tax, though individual municipalities may levy local sales taxes.
  • Local property taxes apply in 24 of Alaska’s municipalities. Rates and exemptions vary by jurisdiction.
  • Federal taxes still apply. Alaska residents must file a federal income tax return with the IRS and pay federal income tax on their income.

Official source: https://tax.alaska.gov | https://pfd.alaska.gov

Quick Questions About Alaska Income Tax

Does Alaska have a state income tax?
No. Alaska has no individual state income tax. It is one of nine states in the U.S. that does not impose an income tax on individuals. Alaska residents pay only federal income tax.

What is the Alaska state income tax rate for 2025?
0%. Alaska imposes no state income tax on individuals. There are no tax brackets, no standard deduction calculations, and no state income tax returns for individual residents.

Do I need to file an Alaska state income tax return?
No. Alaska does not require individuals to file a state income tax return. You must still file a federal return with the IRS if you meet federal filing thresholds.

Is Social Security taxed in Alaska?
No. Because Alaska has no state income tax, Social Security benefits are not subject to any Alaska state tax. Note that Social Security benefits may still be subject to federal income tax depending on your total income.

Does Alaska tax retirement income?
No. Alaska imposes no state income tax on any form of retirement income, including pensions, 401(k) distributions, IRA withdrawals, or military retirement pay. All such income is exempt from Alaska state taxation.

Is military pay taxed in Alaska?
No. Military pay, military retirement pay, and all other income types are exempt from Alaska state income tax because Alaska does not have a state income tax.

What is the Alaska Permanent Fund Dividend?
The Alaska Permanent Fund Dividend (PFD) is an annual cash payment made to eligible Alaska residents from the earnings of the Alaska Permanent Fund, a sovereign wealth fund built on oil revenues. The 2025 PFD amount is $1,000. The PFD is not subject to Alaska state tax, but must be reported as taxable income on your federal return.

Source: https://pfd.alaska.gov | https://dor.alaska.gov

Why Alaska Has No Income Tax: Historical and Legal Background

History of Alaska Individual Income Tax

Alaska did have a personal income tax, but repealed it in 1980 during the oil boom:

  • 1949: Alaska established a personal income tax at 10% of the taxpayer’s federal income tax liability. Both residents and non-residents were taxed, and employers withheld the tax.
  • 1949–1961: The income tax rate was gradually increased from 10% to 16% of federal tax liability.
  • 1975: Alaska shifted to an independent graduated tax rate structure, with progressive rates ranging from 3% to 14.5%, no longer tied to the federal tax liability.
  • 1980: Alaska repealed the personal income tax following the oil boom and the resulting surge in state revenue from oil production. With massive oil revenue flowing into the state treasury, the legislature determined that a personal income tax was no longer necessary.
  • Post-1980 reinstatement attempts: Multiple proposals to reinstate the personal income tax were introduced but failed — including a joint special committee recommendation in 1986, a Governor’s bill (HB 154) in 1987, and HB 252 in 1989.

Source: Alaska State Legislature, Legislative Research — History of Alaska Individual Income Tax, https://www.akleg.gov

Constitutional Framework

Alaska’s taxation authority is governed by Article IX of the Alaska Constitution (Finance and Taxation). Key provisions include:

  • Article IX, Section 1 — Taxing Power: “The power of taxation shall never be surrendered. This power shall not be suspended or contracted away, except as provided in this article.” Alaska’s constitution preserves the authority to tax, but the legislature has chosen not to exercise that authority with respect to individual income.
  • No constitutional prohibition: Unlike some states, Alaska’s constitution does not expressly prohibit a personal income tax. The absence of an income tax is a legislative policy choice, not a constitutional mandate.
  • Proposed constitutional amendment: The Alaska Legislature has at various times considered House Joint Resolution No. 1 (proposed amendment to Article IX, Section 1), which would require voter approval before any broad-based individual income tax could take effect. As of the date of this guide, no such amendment has been ratified.
  • Local taxation powers: Article X, Section 2 of the Alaska Constitution dedicates taxing powers to boroughs and cities only. The state constitution does not authorize local income taxes, and no Alaska municipality levies a local income tax.

Source: Alaska Constitution, Article IX — Finance and Taxation: https://ltgov.alaska.gov/information/alaskas-constitution/ | Alaska State Legislature: https://www.akleg.gov

Statutory Authority

Alaska does not have a statutory individual income tax code because the legislature repealed the personal income tax in 1980 and has not reenacted it.

What does exist:

  • Alaska Statutes Title 43 — Revenue and Taxation: Title 43 of the Alaska Statutes governs the state’s tax laws, including corporate income tax, oil and gas taxes, fisheries taxes, tobacco taxes, and other excise taxes. There is no chapter in Title 43 imposing a personal income tax on individuals.
  • Alaska Permanent Fund Dividend — AS 43.23: The statutory authority for the Permanent Fund Dividend program is Alaska Statute 43.23.005 et seq. This statute establishes residency requirements, eligibility rules, and the formula for calculating dividend amounts.
  • Corporate income tax — AS 43.20: Alaska does impose a corporate income tax on C corporations, with rates ranging from 0% to 9.4%. This does not apply to individuals, sole proprietors, or pass-through entities (partnerships, S corporations, LLCs).
  • Municipal taxation — AS 29.45: Authority for local municipalities to levy property taxes and sales taxes is found in Alaska Statutes Title 29 (Municipal Government).

Official source: Alaska Statutes: https://www.akleg.gov/basis/statutes.asp | Alaska Permanent Fund Dividend Statute AS 43.23: https://pfd.alaska.gov/eligibility/eligibility-requirements

Rate Snapshot — Alaska Individual Income Tax
Tax Attribute Status
State income tax rate None (0%)
Tax structure No individual income tax
Tax brackets None
Standard deduction N/A
Personal exemption N/A
Local income tax None
Statewide sales tax None
Local sales tax Yes — varies by municipality (1%–7%)
State income tax return required No

Source: Alaska Department of Revenue — Tax Division: https://tax.alaska.gov | Alaska Tax Facts (Division of Community and Regional Affairs): https://www.commerce.alaska.gov/web/dcra/officeofthestateassessor/alaskataxfacts.aspx

Comparison: Alaska vs. Other No-Income-Tax States
Nine states impose no broad-based individual income tax as of Tax Year 2025:
State No Income Tax Basis Statewide Sales Tax Unique Feature
Alaska Legislative repeal (1980) None Permanent Fund Dividend paid to residents
Florida Legislative Yes High property tax in many counties
Nevada Legislative Yes Gaming revenue funds government
New Hampshire Constitutional (wages/salary only; investment income taxed) None Interest & dividends tax being phased out
South Dakota Legislative Yes —
Tennessee Legislative Yes —
Texas Constitutional prohibition Yes High property taxes
Washington Legislative (no income tax on wages; capital gains tax enacted) Yes Capital gains tax enacted 2021
Wyoming Legislative Yes Mineral severance revenue

Alaska is uniquely positioned as the only state that both lacks a state income tax and lacks a statewide sales tax — while also distributing annual cash payments to residents through the Permanent Fund Dividend.

Source: Tax Foundation — Alaska Tax Data: https://taxfoundation.org/location/alaska/ | Alaska Department of Revenue: https://dor.alaska.gov

What Is the Alaska Permanent Fund Dividend?

The Alaska Permanent Fund Dividend (PFD) is an annual cash payment distributed by the State of Alaska to eligible residents from the earnings of the Alaska Permanent Fund — one of the world’s largest sovereign wealth funds, built on oil and natural resource royalties.

Background

The Alaska Permanent Fund was established in 1976 by a constitutional amendment (Alaska Constitution, Article IX, Section 15), which required that at least 25% of mineral revenue received by the state be deposited into a dedicated permanent fund. The fund’s principal is constitutionally protected and cannot be spent; only investment earnings may be appropriated by the legislature.

The Permanent Fund Dividend program was created by the Alaska Legislature in 1982 under Alaska Statute 43.23, which established the framework for distributing a portion of the fund’s earnings directly to eligible Alaska residents. Each year, the legislature determines the dividend amount through the appropriations process.

As of mid-2025, the Alaska Permanent Fund’s total value exceeded $85 billion, making it one of the largest sovereign wealth funds in the world.

Source: Alaska Department of Revenue — Permanent Fund Dividend Division: https://pfd.alaska.gov | Alaska Permanent Fund Corporation: https://apfc.org

2025 PFD Amount

The 2025 Permanent Fund Dividend is $1,000 per eligible resident.

The 2025 amount was determined by the Alaska Legislature through House Bill 53. The amount applies to dividend applications for the 2025 dividend year (qualifying year: calendar year 2024).

Historical PFD Amounts (Recent Years)
Dividend Year Amount Per Eligible Resident
2025 $1,000
2024 $1,702 (included Energy Relief Payment)
2023 $1,312
2022 $3,284 (included energy relief)
2021 $1,114
2020 $992

The annual amount varies based on the fund’s investment performance, state budget decisions, and any additional payments authorized by the legislature (such as energy relief payments in certain years).

Source: Alaska Department of Revenue — PFD Division: https://pfd.alaska.gov | PFD Press Release (September 2025): https://dor.alaska.gov/department-of-revenue/news-detail/2025/09/22/department-of-revenue-announces-2025-permanent-fund-dividend-amount

Eligibility Requirements for the 2025 PFD

To receive the 2025 Alaska Permanent Fund Dividend, an applicant must meet all of the following requirements under Alaska Statute 43.23.005:

Residency Requirement

  • Must have been an Alaska resident for the entire calendar year 2024 (the qualifying year)
  • Must intend to remain an Alaska resident indefinitely at the time of application
  • Must not have claimed residency in any other state or country, or obtained a benefit (such as a homestead exemption, resident hunting/fishing license, or resident tuition) based on a claim of residency in another state or country at any time since December 31, 2023

Physical Presence Requirement

  • Must have been physically present in Alaska for at least 72 consecutive hours at some time during 2023 or 2024
  • If absent from Alaska for more than 180 days during the qualifying year, the absence must qualify as an allowable absence under state law

Allowable Absences

Absences from Alaska that do not disqualify an applicant if the individual maintained Alaska domicile and intended to return include:

  • Military service
  • Medical treatment (for the applicant or a dependent)
  • Full-time education
  • Serving as a legislative intern
  • Absences for other reasons, provided they were not for the purpose of establishing residency elsewhere and the applicant maintained Alaska as their permanent place of abode

Source: Alaska PFD Division — Eligibility Requirements: https://pfd.alaska.gov/eligibility/eligibility-requirements | Alaska Statute AS 43.23.005: https://pfd.alaska.gov/eligibility

Criminal Conviction Disqualification

An applicant is not eligible for the 2025 PFD if, during the qualifying year (2024), they were:

  • Sentenced as a result of a felony conviction
  • Incarcerated as a result of a felony conviction
  • Incarcerated as a result of a misdemeanor conviction if the individual was previously convicted of a felony after December 31, 1996, or convicted of two or more prior misdemeanors since January 1, 1997

Source: https://pfd.alaska.gov/payments/tax-information | AS 43.23.008

Children and Minors

Parents or legal guardians may apply on behalf of eligible minor children. The same residency and eligibility rules apply to children. A child born during the qualifying year may be eligible if they have an eligible Alaska resident sponsor and otherwise meet requirements.

Estates

The personal representative of an eligible applicant who died during the qualifying year (between June 30, 2024 and December 31, 2024), after having been an Alaska resident for at least 180 days, may apply for a dividend on behalf of the estate. Estate applications must be filed by March 31 of the year following the dividend year.

Source: https://pfd.alaska.gov/FAQ

How to Apply for the PFD

Application Window

The PFD application window is open January 1 through March 31 each year. Applications received after March 31 are not accepted for the current year’s dividend (with limited exceptions for newly eligible individuals such as newborns).

Application Methods

Online (recommended):

  • Apply through the official myPFD portal: https://pfd.alaska.gov
  • Online applicants can use a myAlaska account for electronic signature
  • Online applications receive immediate confirmation with a confirmation number

Paper application:

  • Paper forms are available at designated distribution centers
  • Paper applications must be returned to the PFD Division by March 31

Source: https://pfd.alaska.gov/forms/2025 | https://pfd.alaska.gov/FAQ

Required Documentation (for first-time or document-verification applicants)

  • Original birth certificate, passport, or naturalization certificate (returned after processing)
  • Working Out of State Questionnaire (if applicable — form available at https://pfd.alaska.gov/forms/2025)
  • Disabled Application with Certification form (if applicable)

Checking Application Status

Applicants can check the status of their application by logging into the myPFD portal at https://pfd.alaska.gov. Look for the status “Eligible – Not Paid” before payment disbursement dates.

PFD Division Contact:
Phone: 907-465-2326
Fax: 907-465-3470
Website: https://pfd.alaska.gov

2025 PFD Payment Schedule
Payments are distributed in waves throughout the year. The 2025 PFD payment schedule included:
Payment Wave Eligibility Cutoff Date Disbursement Date
First wave (direct deposit, online filers) September 18, 2025 October 2, 2025
Second wave (all payment methods) October 13, 2025 October 23, 2025
Third wave January 7, 2026 January 15, 2026
Fourth wave February 11, 2026 (March 2026)
Fifth wave March 11, 2026 March 19, 2026

Applicants with direct deposit receive payments faster than those receiving paper checks. Applicants can update their payment information (including bank account for direct deposit) through the myPFD portal.

Source: https://pfd.alaska.gov (official payment schedule announcements)

Federal Tax Treatment of the PFD

The PFD Is Taxable at the Federal Level

Although Alaska has no state income tax and does not tax the PFD at the state level, the PFD is taxable income for federal income tax purposes and must be reported on your federal return.

Key federal tax facts for the 2025 PFD:

  • Taxable amount: The full $1,000 is taxable income for adults. For children, taxability depends on the child’s total income — if the PFD causes the child’s gross income to exceed the federal filing threshold, a federal return may be required.
  • Tax form: The Alaska PFD Division issues 1099-MISC forms to recipients. The PFD is reported in Box 3 (Other Income) on the 1099-MISC.
  • Where to report: Report PFD income on your federal Form 1040, Schedule 1 (Additional Income), Line 8 (Other Income).
  • Even garnished dividends must be reported: If part or all of your PFD was withheld (garnished) by the state for debts, child support, or other obligations, the entire dividend amount must still be reported as federal taxable income.
  • Federal Tax ID for PFD: The state’s Federal Tax Identification Number for PFD tax reporting purposes is 92-6001185.

Penalty for Non-Reporting

Failure to report the PFD on your federal income tax return may result in a negligence penalty or other IRS sanctions.

Source: Alaska PFD Division — Tax Information: https://pfd.alaska.gov/payments/tax-information | IRS: 1-800-829-1040

Children’s PFD and the “Kiddie Tax”

For minor children, the PFD may be subject to the federal “kiddie tax” rules (IRC Section 1(g)), which taxes a child’s unearned income above a threshold at the parent’s marginal rate. Families should consult a tax professional regarding the kiddie tax implications of the PFD for dependent children.

Pick.Click.Give. — Charitable Contribution Program

Alaska residents may voluntarily donate all or a portion of their PFD to eligible Alaska nonprofit organizations through the Pick.Click.Give. program. Donations are made directly from the PFD before disbursement.

  • Designations are made during the PFD application process (January 1 – March 31)
  • Donations go directly to the chosen nonprofit(s)
  • Charitable contributions made through Pick.Click.Give. may be deductible on your federal return as charitable contributions, subject to IRS rules

Source: https://pfd.alaska.gov (Pick.Click.Give. section)

Alaska 529 Education Savings Plan

Alaska residents may also choose to direct all or part of their PFD into the Alaska 529 Education Savings Plan at the time of application.

  • The Alaska 529 plan (managed through the College Savings Plan of Alaska) allows tax-advantaged savings for qualified education expenses
  • Contributions grow federal tax-deferred; qualified withdrawals are federal tax-free
  • Because Alaska has no state income tax, there is no additional state income tax deduction benefit, but federal benefits fully apply

Source: https://pfd.alaska.gov (Alaska 529 Education Savings Plan section)

What Does and Does Not Exist

Because Alaska has no state income tax and no statewide sales tax, the tax picture for Alaska residents is simpler than most states. The taxes that do exist in Alaska are primarily local (municipal) and federal.

Alaska Tax Types by Level
Tax Type State Level Local/Municipal Level
Individual income tax None None
Corporate income tax Yes (0%–9.4%, C corps only) None
Statewide sales tax None Yes — select municipalities only
Property tax None Yes — select municipalities only
Estate/inheritance tax None None
Local income tax None None

Local Property Taxes

Who Levies Property Tax in Alaska?

Alaska is unique in that a large portion of the state’s land mass is not subject to any property tax. Under Alaska law (AS 29.45.010), property taxation authority is delegated exclusively to incorporated municipalities — boroughs and cities. Unincorporated areas of Alaska have no legal authority to levy any tax.

As of the most recent data available:

  • Alaska has 165 incorporated municipalities (19 boroughs + 146 cities)
  • Only 24 municipalities (15 boroughs + 9 cities) levy a property tax
  • The majority of Alaska’s vast land area has no property tax at all

Source: Alaska Tax Facts (Division of Community and Regional Affairs): https://www.commerce.alaska.gov/web/dcra/officeofthestateassessor/alaskataxfacts.aspx | AS 29.45.010: https://www.commerce.alaska.gov/web/portals/4/pub/title_29.pdf

Property Tax Rate Limits

Under AS 29.45.090, Alaska municipalities may not levy a property tax in excess of 30 mills (3% of assessed value), with exceptions for taxes pledged to pay bonded debt or taxes approved by voters for specific service areas.

Mandatory Property Tax Exemptions

All Alaska municipalities that levy a property tax are required by state law to provide the following exemptions under AS 29.45.030:

Senior Citizen and Disabled Veteran Exemption (Mandatory):
The primary residence of the following individuals is exempt from property taxation on the first $150,000 of assessed value:

  • Residents age 65 or older
  • Disabled veterans with a service-connected disability of 50% or more
  • Residents age 60 or older who are widows or widowers of persons who qualified under the above categories

Municipalities may by voter-approved ordinance extend this exemption to additional categories (such as widows/widowers under age 60 of disabled veterans, or survivors of servicemembers killed in action).

Source: AS 29.45.030(e): https://www.commerce.alaska.gov/web/dcra/LocalGovernmentResourceDesk/TaxationAssessment/PropertyTaxExemptionsinAlaska.aspx | Administrative Regulations: 3 AAC 135.010-.085

Other Mandatory Exemptions under AS 29.45.030 include:

  • Household furniture and personal effects of household members
  • Natural resources in place
  • Property used exclusively for nonprofit religious, charitable, cemetery, hospital, or educational purposes
  • Property owned by ANCSA (Alaska Native Claims Settlement Act) Native corporations, unless leased or developed

Optional Exemptions: Municipalities may also offer optional exemptions under AS 29.45.050, including an exemption of up to $50,000 of a primary residence’s assessed value. Contact your local municipal assessor to determine what optional exemptions are available in your jurisdiction.

Source: https://www.commerce.alaska.gov/web/dcra/LocalGovernmentResourceDesk/TaxationAssessment/PropertyTaxExemptionsinAlaska.aspx

Where to Find Local Property Tax Information

For property tax rates, assessment procedures, and exemption applications in your municipality, contact your local assessor’s office directly. A directory of Alaska tax jurisdictions is available at:

Alaska Tax Jurisdictions Directory: https://www.commerce.alaska.gov/web/dcra/OfficeoftheStateAssessor/TaxJurisdictions.aspx

Local Sales Taxes

No Statewide Sales Tax

Alaska has no statewide sales tax. This makes Alaska one of only five states (along with Delaware, Montana, New Hampshire, and Oregon) with no statewide sales tax.

Source: https://www.commerce.alaska.gov/web/dcra/LocalGovernmentResourceDesk/TaxationAssessment/SalesTax.aspx

Municipal Sales Taxes

Although there is no statewide sales tax, Alaska state law (AS 29.45.650 and AS 29.45.700) authorizes cities and boroughs to levy a local sales tax, subject to voter approval. Key facts:

  • Approximately 107–110 municipalities levy some form of a local sales tax
  • Rates range from 1% to 7%, with typical rates of 2%–5%
  • A sales tax is not authorized unless an election is held and approved by a majority of voters
  • There is no cap on the sales tax rate that a municipality may charge (a prior cap was removed)
  • If both a borough and a city within that borough levy sales taxes, the consumer pays the combined total of both taxes

Other local taxes that some municipalities levy include:

  • Raw fish taxes
  • Hotel/motel “bed” taxes (lodging taxes)
  • Severance taxes
  • Liquor and tobacco taxes
  • Gaming (pull tabs) taxes
  • Fuel transfer taxes

Source: Alaska Sales Tax Information (Division of Community and Regional Affairs): https://www.commerce.alaska.gov/web/dcra/OfficeoftheStateAssessor/AlaskaSalesTaxInformation.aspx | Alaska Tax Facts: https://www.commerce.alaska.gov/web/dcra/officeofthestateassessor/alaskataxfacts.aspx

How to Find Local Sales Tax Information

Because sales tax rules are set at the local level with very little state regulation, you must contact the municipality directly to determine:

  • What goods and services are taxable
  • The applicable rate
  • How to file and remit sales tax (if you are a business)

Alaska Tax Jurisdictions locator: https://www.commerce.alaska.gov/web/dcra/OfficeoftheStateAssessor/TaxJurisdictions.aspx

Alaska Taxable Annual Report (lists all municipalities and the taxes each levies): https://www.commerce.alaska.gov/web/dcra/officeofthestateassessor/AlaskaTaxableDatabaseReportsandForms.aspx

Alaska Corporate Income Tax (Does Not Apply to Individuals)

Alaska imposes a corporate income tax on C corporations, with a graduated rate structure ranging from 0% to 9.4%. This applies only to C corporations — it does not apply to individuals, sole proprietors, partnerships, S corporations, or LLCs taxed as pass-through entities.

Alaska Corporate Income Tax Brackets
Alaska Taxable Income Tax Rate
$0 – $25,000 0%
$25,001 – $49,000 2%
$49,001 – $74,000 3%
$74,001 – $99,000 4%
$99,001 – $124,000 5%
$124,001 – $148,000 6%
$148,001 – $173,000 7%
$173,001 – $198,000 8%
$198,001 – $222,000 9%
Over $222,000 9.4%

Pass-through entities (partnerships, S corporations, most LLCs) do not pay Alaska state income tax at the entity level. Income flows through to individual owners, who are also not subject to Alaska individual income tax.

Source: Alaska Department of Revenue — Tax Division: https://tax.alaska.gov

Special Populations

Military Personnel

Active Duty Military

Military pay is not subject to Alaska state income tax — because Alaska has no individual income tax at all. Active duty servicemembers stationed in Alaska pursuant to military orders do not have any Alaska state income tax obligation.

Servicemembers Civil Relief Act (SCRA):
Federal law (50 U.S.C. § 3901 et seq.) protects active duty servicemembers from taxation by their state of military assignment. Under the SCRA:

  • Active duty military members stationed in Alaska do not become Alaska residents solely by virtue of being stationed here under military orders
  • Military pay remains taxable only by the servicemember’s state of legal domicile (home state)
  • Because Alaska has no income tax, Alaska residents serving in another state do not owe Alaska income tax on their military pay (there is no Alaska income tax to owe)

Military Spouses Residency Relief Act (MSRRA):
Under the MSRRA (as amended by the Veterans Benefits and Transition Act of 2018):

  • A military spouse may elect to use the same state of domicile as the servicemember
  • A spouse of an active duty servicemember stationed in Alaska who maintains domicile in another state is not subject to Alaska income tax on wages earned in Alaska (again, moot since Alaska has no income tax — but this is relevant if the spouse earns income that would be taxable in another state)

Source: U.S. Department of Defense — SCRA information | Alaska Department of Military and Veterans Affairs: https://dmva.alaska.gov

Military Retirement Pay

Alaska imposes no state income tax on military retirement pay — because Alaska has no individual income tax. Military retirees living in Alaska pay no state tax on their retirement checks.

This is a significant benefit for military retirees. Alaska is one of the most favorable states in the country for military retirees from a state income tax perspective.

Alaska National Guard

Members of the Alaska National Guard and Alaska Naval Militia are subject to the same federal income tax rules as other taxpayers. No Alaska state income tax applies.

Remote Workers and Multi-State Taxation

Alaska Resident Working Remotely for an Out-of-State Employer

No Alaska state income tax issue. Because Alaska has no individual income tax, Alaska residents working remotely for employers in any other state owe no Alaska state income tax on that income. The employer’s location is irrelevant to Alaska tax obligations — there are none.

However, you may owe income tax to another state. Depending on the other state’s tax laws and any applicable reciprocity agreements, an Alaska resident working for an out-of-state employer could potentially owe income tax in the employer’s state in certain circumstances. This is state-specific. States like New York apply a “convenience of the employer” rule under which non-residents may owe New York tax on income from New York-based employers even if working remotely.

Key principle for Alaska residents working remotely:

  • Alaska owes you nothing — no state return, no tax
  • The other state(s) where your employer is based, or where you physically work, may have their own tax claims on your income
  • Consult the tax rules of those specific states

Non-Resident Working in Alaska (Temporarily or Permanently)

Alaska imposes no income tax on non-residents because Alaska has no individual income tax. A non-resident who earns wages, business income, or any other type of income while physically present in Alaska owes no Alaska state income tax on that income.

This is a significant advantage for workers temporarily assigned to Alaska for projects (construction, oil field work, fishing industry, government contracts, etc.) — no Alaska income tax filing is required regardless of how much income is earned in the state.

Non-residents still owe income tax to their home state on income earned, including income from work performed in Alaska, under their home state’s sourcing rules.

“Convenience of the Employer” Rule

Alaska does not apply a “convenience of the employer” rule. Alaska imposes no income tax on anyone — residents or non-residents — so no sourcing rules, convenience rules, or other income allocation rules apply at the state level.

Students

College students attending school in Alaska do not face any Alaska state income tax complications — because there is no Alaska income tax.

PFD eligibility for students: Full-time students attending college outside Alaska may still be eligible for the Alaska Permanent Fund Dividend if they:

  • Were Alaska residents for the entire calendar year 2024
  • Are absent for educational purposes (an allowable absence under AS 43.23)
  • Intend to return to Alaska after completing their education
  • Meet all other PFD eligibility requirements

Students who establish domicile in another state for purposes of establishing residency (registering to vote, obtaining a driver’s license, claiming in-state tuition) may jeopardize their PFD eligibility.

Source: https://pfd.alaska.gov/eligibility/eligibility-requirements

Part-Year Residents (Moving To or From Alaska)

There is no part-year resident state income tax return for Alaska — because Alaska has no individual income tax. Moving to or from Alaska mid-year does not create any Alaska state income tax filing obligation.

PFD implications of moving:

  • Moving TO Alaska during 2024: You are generally not eligible for the 2025 PFD because you must have been an Alaska resident for the entire calendar year 2024 (January 1 through December 31, 2024). You may become eligible for the 2026 PFD if you maintain Alaska residency throughout all of 2025.
  • Moving FROM Alaska during 2024: If you were an Alaska resident for the full calendar year 2024 but then moved away before applying, you must assess whether you still qualify. You must intend to remain an Alaska resident indefinitely at the time of application. If you have established residency in another state, you may be ineligible.

Source: https://pfd.alaska.gov/FAQ | https://pfd.alaska.gov/eligibility/eligibility-requirements

Common Tax Situations for Alaska Residents

Situation: “I work remotely for a company in California. Do I owe Alaska income tax?”

Answer: No. Alaska has no individual income tax. You owe no Alaska state tax on your income regardless of where your employer is located.

Note: You may owe California income tax depending on California’s sourcing rules for non-residents. California has aggressive residency auditing practices and specific rules for non-residents working for California-based employers. Consult a tax professional familiar with California non-resident taxation.

Situation: “I received the $1,000 Alaska PFD. Do I need to file an Alaska tax return?”

Answer: No. There is no Alaska individual income tax return. However, you must report the $1,000 PFD as income on your federal return (Form 1040, Schedule 1). You will receive a 1099-MISC from the PFD Division for this amount.

Source: https://pfd.alaska.gov/payments/tax-information

Situation: “I’m retired and moved to Alaska from a high-tax state. What are my state tax obligations?”

Answer: Once you are an Alaska resident, you have no Alaska state income tax obligations — regardless of the type or amount of retirement income you receive. Social Security, pensions, IRA distributions, investment income — all are exempt from Alaska state tax. You still owe federal income tax on applicable income.

Situation: “I’m a military contractor working in Alaska for 6 months. Do I owe Alaska income tax?”

Answer: No. Alaska does not impose income tax on anyone — residents or non-residents. Income earned from work performed in Alaska is not subject to any Alaska state income tax. You must still pay income tax to your home state on income earned, subject to your home state’s rules.

Federal Tax Obligations for Alaska Residents

While Alaska imposes no state income tax, Alaska residents are fully subject to federal income tax administered by the Internal Revenue Service (IRS). Understanding your federal obligations is essential — Alaska’s lack of a state income tax does not reduce federal tax liability.

Federal Filing Requirements

Alaska residents must file a federal Form 1040 if their gross income meets or exceeds the federal filing thresholds for Tax Year 2025:

Federal Filing Thresholds — Tax Year 2025
Filing Status Federal Filing Threshold (Tax Year 2025)
Single (under age 65) $14,600
Single (age 65 or older) $16,550
Married Filing Jointly (both under 65) $29,200
Married Filing Jointly (one spouse 65+) $30,750
Married Filing Jointly (both 65+) $32,300
Married Filing Separately $5
Head of Household (under 65) $21,900
Head of Household (age 65+) $23,850
Qualifying Surviving Spouse (under 65) $29,200
Qualifying Surviving Spouse (65+) $30,750

Note: Self-employed individuals must file a federal return if net self-employment income is $400 or more, regardless of total gross income.

Source: IRS Publication 17 (Your Federal Income Tax): https://www.irs.gov/pub/irs-pdf/p17.pdf | IRS Form 1040 Instructions: https://www.irs.gov/forms-pubs/about-form-1040

Federal Income Tax Rates (Tax Year 2025)

Alaska residents pay federal income tax at the same rates as all other U.S. taxpayers. The 2025 federal income tax brackets are:

Federal Income Tax Brackets — Single Filers (Tax Year 2025)
Federal Taxable Income Federal Tax Rate
$0 – $11,925 10%
$11,926 – $48,475 12%
$48,476 – $103,350 22%
$103,351 – $197,300 24%
$197,301 – $250,525 32%
$250,526 – $626,350 35%
Over $626,350 37%
Federal Income Tax Brackets — Married Filing Jointly (Tax Year 2025)
Federal Taxable Income Federal Tax Rate
$0 – $23,850 10%
$23,851 – $96,950 12%
$96,951 – $206,700 22%
$206,701 – $394,600 24%
$394,601 – $501,050 32%
$501,051 – $751,600 35%
Over $751,600 37%

Source: IRS Revenue Procedure 2024-40 (2025 tax year inflation adjustments): https://www.irs.gov/pub/irs-drop/rp-24-40.pdf

Federal Standard Deductions (Tax Year 2025)
Filing Status Federal Standard Deduction
Single $15,000
Married Filing Jointly $30,000
Married Filing Separately $15,000
Head of Household $22,500

Additional standard deduction (age 65+ or blind): $1,600 per qualifying condition (single/head of household) or $1,300 per qualifying condition (married).

Source: IRS: https://www.irs.gov/taxtopics/tc551

Federal Deadlines for Alaska Residents (Tax Year 2025)
Deadline Date Description
Regular filing deadline April 15, 2026 Federal Form 1040 for Tax Year 2025
Extension deadline October 15, 2026 With automatic extension filed by April 15
Estimated tax — Q1 April 15, 2026 For self-employed and others with withholding shortfalls
Estimated tax — Q2 June 16, 2026 —
Estimated tax — Q3 September 15, 2026 —
Estimated tax — Q4 January 15, 2027 —

Disaster relief extensions: The IRS periodically grants filing extensions to Alaska residents affected by natural disasters (floods, wildfires, etc.). Check IRS.gov for any current disaster relief affecting Alaska taxpayers.

Source: IRS: https://www.irs.gov/filing/individuals/when-to-file

Reporting the Alaska Permanent Fund Dividend on Your Federal Return

The PFD must be reported on your federal return:

  1. You will receive IRS Form 1099-MISC from the Alaska PFD Division. The $1,000 PFD amount appears in Box 3 (Other Income).
  2. Report the PFD on Form 1040, Schedule 1, Line 8 (Other Income). Write “PFD” or “Alaska Permanent Fund Dividend” as the description.
  3. If the PFD was partially or fully garnished, report the entire original amount — not just the amount you received.

Source: https://pfd.alaska.gov/payments/tax-information | IRS Form 1040 Instructions

Information Verification Log

Information Verification Log — Alaska Tax Data
Information Type Source Last Verified
No individual income tax status tax.alaska.gov February 19, 2026
Historical repeal of income tax (1980) akleg.gov February 19, 2026
Constitutional authority (Article IX) ltgov.alaska.gov February 19, 2026
2025 PFD amount ($1,000) pfd.alaska.gov February 19, 2026
No statewide sales tax commerce.alaska.gov — Alaska Tax Facts February 19, 2026
Local sales tax rates (1%–7%) commerce.alaska.gov — Alaska Tax Facts February 19, 2026
Alaska Statutes AS 43.23 (PFD) pfd.alaska.gov — Eligibility Requirements February 19, 2026
No local income tax commerce.alaska.gov — Taxation & Assessment February 19, 2026

Where to Check for Updates

Permanent Fund Dividend amounts and announcements:
https://pfd.alaska.gov — Updated each fall when the legislature determines the annual PFD amount

Alaska tax legislation:
https://www.akleg.gov — Alaska State Legislature; track bills affecting tax law

Alaska Department of Revenue news:
https://dor.alaska.gov — Press releases and announcements

Federal tax changes affecting Alaska residents:
https://www.irs.gov/newsroom — IRS news releases and tax law updates

Local municipal tax rates:
Contact your municipality directly or consult the Alaska Tax Jurisdictions Directory:
https://www.commerce.alaska.gov/web/dcra/OfficeoftheStateAssessor/TaxJurisdictions.aspx

Note: This guide will be reviewed and updated in January 2027 for Tax Year 2026. For real-time updates, always consult the official Alaska Department of Revenue website (https://tax.alaska.gov) and the PFD Division website (https://pfd.alaska.gov).

Official Alaska Government Resources

All information in this guide is compiled from official government sources only.

Alaska Department of Revenue — Tax Division

Alaska Permanent Fund Dividend Division

Alaska Division of Community and Regional Affairs — Office of the State Assessor

Alaska State Legislature

Alaska Constitution

Alaska Permanent Fund Corporation

Federal Resources for Alaska Taxpayers

Tax Glossary

Alaska Permanent Fund:
A sovereign wealth fund established by constitutional amendment in 1976 (Alaska Constitution Article IX, Section 15) to save a portion of Alaska’s oil royalty revenue. Principal is constitutionally protected; investment earnings may be appropriated by the legislature.

Alaska Permanent Fund Dividend (PFD):
An annual cash payment to eligible Alaska residents, distributed from a portion of the Permanent Fund’s investment earnings. The 2025 PFD is $1,000 per eligible resident.

Qualifying Year:
For PFD purposes, the calendar year preceding the year in which an individual applies for a current-year dividend. For the 2026 PFD, the qualifying year is 2025.

Allowable Absence:
Under AS 43.23, an absence from Alaska that does not disqualify an otherwise eligible resident from receiving the PFD. Includes military service, medical treatment, full-time education, and certain other absences, provided the individual maintained Alaska domicile and intended to return.

Domicile:
Your permanent legal home — the place you intend to return to and remain indefinitely. An individual can have only one domicile at a time. Domicile is important for PFD eligibility (you must intend to remain an Alaska resident).

Borough:
Alaska’s equivalent of a county. Alaska has 19 incorporated boroughs, 15 of which levy a property tax.

Mill Rate:
A measure of property tax rate expressed as dollars of tax per $1,000 of assessed value. One mill = $1 per $1,000 of assessed value = 0.1%.

Pass-Through Entity:
A business structure (partnership, S corporation, LLC) where income is taxed at the owner’s individual level, not the entity level. Because Alaska has no individual income tax, owners of Alaska pass-through entities pay no Alaska state income tax on business income.

C Corporation:
A corporation taxed separately from its owners. Alaska imposes a graduated corporate income tax (0%–9.4%) on C corporations. Individual owners are not subject to Alaska individual income tax on corporate dividends received (no state income tax).

SCRA (Servicemembers Civil Relief Act):
Federal law protecting active duty military members from taxation by their state of military assignment, among other protections.

MSRRA (Military Spouses Residency Relief Act):
Federal law allowing military spouses to elect to use the same state of domicile as the servicemember, preventing forced changes of domicile due to military reassignment.

VITA (Volunteer Income Tax Assistance):
An IRS-sponsored program providing free federal tax return preparation to eligible individuals (generally income under ~$67,000). Available at various locations throughout Alaska.

Federal AGI (Adjusted Gross Income):
Total federal gross income minus specific above-the-line deductions. The starting point for calculating federal taxable income. Because Alaska has no state income tax, there is no Alaska-specific AGI calculation.

Others

California
Virginia
Colorado
Oregon
Missouri
Connecticut
Louisiana
Wisconsin
South Carolina
Nevada
Kentucky
Maryland
Tennessee
Indiana
Alabama

Legal Disclaimer: Nature of This Compilation This document is a compilation of publicly available information from official government sources. It is NOT: Legal advice An interpretation of laws or regulations A substitute for consultation with a licensed attorney A comprehensive treatment of all applicable laws Guaranteed to be complete or current