Does Alaska have a state income tax? No. Here is what Alaskans pay instead

No. Alaska repealed its individual income tax in 1980, back to January 1, 1979, and state law (AS 43.20.012) says the income tax does not apply to individuals. The Tax Division says there is therefore no state income tax withholding from pay. Wages, pensions, Social Security and investment income face no Alaska income tax, and there is no Alaska individual return for nearly anyone to file.

Bills come up regularly. In the 2025–2026 Legislature, HB 152 proposed a 4% “education tax” on individual income over $150,000 ($300,000 joint) plus $150 per worker, and the governor proposed a seasonal statewide sales tax (HB 284 and SB 227). None passed, and bills that did not pass end when the new Legislature is seated in January 2027.

Alaska has no state sales or use tax, but many boroughs and cities levy one. On the October 2026 rate sheet of the Alaska Remote Seller Sales Tax Commission, which covers its member communities, the highest combined rate is 7.85% in Homer (3% Kenai Peninsula Borough plus 4.85% city), and Kodiak, Cordova, Seward and Wrangell charge 7%. Juneau charges 5%, and Anchorage has no general sales tax. Some towns change rates by season, and many tax only part of a single large purchase.

Online sellers with more than $100,000 of sales into Alaska collect local sales tax for member communities through the Commission.

The 2025 dividend was $1,000. The 2026 dividend is $1,200: a $1,000 dividend plus a one-time $200 energy relief payment. 2026 payments went out October 1 and October 22, with later runs on November 19 and December 17 for applications that become eligible later. The Legislature sets the amount each year.

You apply each year from January 1 to March 31, and each person, including each child, needs an application. To qualify for the 2027 dividend you must have been an Alaska resident for all of 2026 and intend to stay indefinitely, and you generally cannot be away more than 180 days unless the absence is an allowed one, such as school, military service or medical treatment. You can check status on myPFD with your name, Social Security number, date of birth and Alaska license or ID number.

Yes, on your federal return. The PFD Division says dividends for adults are taxable for federal income tax purposes, including any part that was garnished. You get a Form 1099-MISC through myPFD and report the dividend on line 8g of Schedule 1 (Form 1040). Alaska does not tax it.

For 2026, the Legislature asked the Department of Revenue to seek a federal exemption for the $200 energy relief portion, but there is no IRS ruling, and the PFD Division’s 2026 tax page treats the full $1,200 as reportable. In 2024 the IRS treated the whole dividend, energy relief included, as taxable. A child whose only income is one PFD is below the $1,350 unearned income filing threshold, so usually no return is needed for the child.

Property tax is levied only by boroughs and cities, at local rates; the state taxes oil and gas property but not homes. State law requires every municipality to exempt the first $150,000 of assessed value of a primary home owned and occupied by someone 65 or older, a veteran with a disability rated 50% or more, or a qualifying widow or widower at least 60. A municipality can require the owner to be eligible for the PFD.

Alaska employers withhold no state income tax, but employees pay an unemployment insurance contribution of 0.5% of wages up to the taxable wage base: $51,700 for 2025 (at most $258.50) and $54,200 for 2026 (at most $271). Employers pay their own unemployment tax as well.

A few other state taxes reach households or businesses.

Moving to Alaska ends another state’s income tax only once you change your domicile. California says you keep a domicile until you abandon it, physically move and intend to stay elsewhere, and New York says your New York domicile does not change until you show you have abandoned it and set up a new one. In the year you move you usually file a part-year return in the old state.

PFD residency works the other way round: doing anything to claim residency in another state, such as registering to vote there or filing a resident income tax return, makes you ineligible for that year’s dividend. For military members, the PFD Division requires Alaska as the state of legal residence on their pay records and warns that filing a resident return in another state could cost the dividend.

Alaska residents file a federal Form 1040 when their income requires it, including the PFD as income. There is no state refund to track, so use the IRS “Where’s My Refund?” tool, which shows a status about 24 hours after you e-file or four weeks after you mail a paper return.