Alaska — Personal Income Tax

Alaska does not impose a personal income tax on individuals. The state originally enacted a personal income tax in 1949, but repealed it in 1980 following the oil boom and resulting surge in state revenue from oil production. Alaska Statutes Title 43 (Revenue and Taxation) contains the Alaska Net Income Tax Act at Chapter 20, but that chapter imposes tax only on corporations, not on resident, nonresident, or part-year resident individuals.

Source: Alaska Legislature, History of Alaska Individual Income Tax

Alaska repealed its individual income tax in 1980. The state had originally enacted a personal income tax in 1949, but repealed it following the oil boom and resulting surge in state revenue from oil production. The repeal removed the tax previously imposed under AS 43.20.010 and related provisions of the Alaska Net Income Tax Act on individuals, while retaining the corporate income tax under AS 43.20.011. As a result, entities whose income and losses are reported on individual income tax returns of their members or partners are not subject to tax in Alaska because the individual income tax no longer exists.

Source: Alaska Legislative Research Services, Memorandum on Business Entities and Alaska Taxation

Alaska residents, part-year residents, and nonresidents are not required to file a state individual income tax return because Alaska does not impose a personal income tax. Federal income tax filing requirements continue to apply. Alaska municipalities and boroughs are also prohibited from levying a personal income tax under AS 43.20.290, enacted in 1961.

Source: Alaska Legislature, History of Alaska Individual Income Tax

Alaska law explicitly prohibits local governments from levying income‑type taxes on individuals. Under AS 43.20.290, “No tax may be levied and collected upon the net income of resident or nonresident individuals by a general law city or by a home rule city or any other political subdivision of the state.” This statutory prohibition, originally enacted in 1961, remains in force through at least July 12, 2026, with no sunset or scheduled repeal.

No local income-type taxes or disguised equivalents: Since adoption of AS 43.20.290, there is no record—in statutes, administrative bulletins, regulations, or published Alaska court decisions—of any municipality or borough attempting to impose a head tax, employment tax, payroll tax, or other levy that operates in substance as a personal income tax. Similarly, no litigation or administrative challenge over such a tax appears in the state’s legal publications. Ongoing legislative and judicial monitoring as of July 2026 reveals no pending or enacted attempts at such taxes or circumventions.

Types of permissible municipal taxes distinguished: Alaska municipalities retain authority to impose other forms of non-income-based taxes and fees. For example, occupational and licensing fees that are not determined by or measured by net income remain within municipal powers unless otherwise prohibited. No published Alaska Supreme Court opinion as of July 2026 has classified any such municipal fee or charge as a prohibited net income tax.

Summary for practitioners: As of July 12, 2026, Alaska law clearly continues to forbid any form of municipal income taxation under AS 43.20.290. There are no known recent or pending local efforts to impose or disguise head, occupational, or payroll charges as an income tax. Monitoring for potential statutory circumventions is still warranted, but no such risk appears in the official state record or case law as of this date.

Source: AS 43.20.290

Alaska imposes no state-level income tax withholding requirement on employers, whether in-state or out-of-state, because Alaska does not impose a personal income tax on individuals.

Repealed income tax and withholding provisions Alaska repealed its individual income tax effective for tax years beginning after December 31, 1978. As a result, all statutory and regulatory requirements for employer withholding of individual income tax have also been repealed. No section of the Alaska Statutes or the Alaska Administrative Code currently imposes or describes any personal income tax withholding obligation for employers.

Non-income tax withholding obligations Employers in Alaska must comply with wage withholding for federal income tax and federal FICA, and also must withhold employee contributions for Alaska unemployment insurance under Alaska Stat. § 23.20.165(c). This unemployment insurance deduction is not an income tax withholding. Court-ordered wage withholding (such as for child support) is also distinct from income tax withholding. Failure to comply with the required unemployment insurance deductions is addressed under Alaska's unemployment insurance system.

Summary No Alaska statute, regulation, or official agency guidance imposes income tax withholding obligations on employers as of June 2026, regardless of employer location, because Alaska does not levy or administer such a tax.

Source: AS 23.20.165 (Unemployment Insurance Contribution Withholding)

Establishing Alaska residency does not by itself terminate individual income tax obligations to the state you moved from. Because Alaska imposes no personal income tax, practitioners and individuals often assume that physically relocating to Alaska and registering to vote, obtaining an Alaska driver's license, or qualifying for the Alaska Permanent Fund Dividend automatically ends their prior state's tax claim. That assumption is incorrect. Each state with an income tax applies its own residency and domicile tests, and many states maintain that an individual remains a resident (and therefore taxable on worldwide income) until the individual both establishes domicile in the new state and severs the prior state's domicile by abandoning the intent to return.

California's domicile and residency framework

California taxes an individual as a resident under either of two independent tests: (a) the individual is in California for other than a temporary or transitory purpose, regardless of domicile; or (b) the individual is domiciled in California and any absence is temporary or transitory. Domicile is the place where an individual has a permanent home and intends to return whenever absent. An individual claiming to have changed domicile from California to Alaska must show both physical presence in Alaska and intent to remain in Alaska indefinitely. The California Franchise Tax Board examines factors including location of spouse and children, location of principal residence, voter registration, driver's license, professional licenses, bank accounts, real property, and social ties.

New York's domicile and statutory residency tests

New York applies two independent residency tests under N.Y. Tax Law § 605. An individual is a New York resident if (1) domiciled in New York, or (2) not domiciled in New York but maintaining a permanent place of abode in New York for substantially all of the taxable year and spending more than 183 days in New York. A New York domicile does not change "until you can demonstrate that you have abandoned your New York domicile and established a new domicile outside New York State." Residents are taxed on worldwide income.

Massachusetts domicile and statutory residency

Massachusetts defines a resident as (1) an individual domiciled in Massachusetts, or (2) an individual not domiciled in Massachusetts who maintains a permanent place of abode in Massachusetts and spends more than 183 days in the state during the taxable year. Massachusetts guidance provides that to acquire a new domicile outside Massachusetts, an individual must have physical presence in the new location, an intent to make that location the individual's home either indefinitely or permanently, and an intent not to return to reside in Massachusetts. Residents are taxed on worldwide income; nonresidents are taxed only on income derived from or connected to sources in Massachusetts.

New Jersey domicile and the 30-day safe harbor

New Jersey treats as a resident any person domiciled in New Jersey, except a person who (1) maintains no permanent place of abode in New Jersey, (2) maintains a permanent place of abode outside New Jersey, and (3) spends 30 days or fewer in New Jersey during the taxable year. In addition, any person who maintains a permanent place of abode in New Jersey and spends more than 183 days in the state is taxed as a resident, whether or not domiciled in New Jersey. New Jersey residents are taxed on worldwide income; nonresidents are taxed only on income from New Jersey sources. An individual's domicile "continues until you establish a new permanent home elsewhere."

Common steps taken by individuals moving to Alaska

Individuals moving to Alaska from a state with income tax commonly take the following steps to support a claim of domicile change, though each state evaluates domicile on all facts and circumstances:

• Sever ties in the prior state—close or transfer bank accounts, surrender the prior state's driver's license, update professional licenses to Alaska addresses, sell or lease the prior-state home (retaining it as a vacation property may indicate continued domicile), update estate-planning documents to reflect Alaska domicile, and file a final resident return in the source state marking the move date.
• Establish Alaska ties—obtain an Alaska driver's license, register to vote in Alaska, register vehicles in Alaska, move household goods and family to Alaska, open Alaska bank accounts, obtain Alaska professional licenses if applicable, and apply for the Alaska Permanent Fund Dividend (which requires one full calendar year of Alaska residency and intent to remain indefinitely).
• Track time if spending significant periods outside Alaska—a taxpayer who spends more than half the year outside Alaska (whether in the prior state or elsewhere) may face a residency challenge from the prior state or a claim that Alaska residency was not actually established.
• Be prepared for residency audits—California, New York, Massachusetts, and New Jersey routinely audit high-income individuals who claim to have moved to no-income-tax states. The burden of proof is on the taxpayer to demonstrate both the new domicile and the abandonment of the old.

Multi-state filings in the move year

In the calendar year of the move, an individual will typically file (1) a part-year resident return in the prior state, reporting worldwide income earned while a resident and source income earned while a nonresident, and (2) no Alaska return, because Alaska has no personal income tax. If the prior state challenges residency, the individual may be required to file a full-year resident return in that state and assert the change-of-domicile defense, often requiring professional representation.

Source: FTB Publication 1031 (2024), Guidelines for Determining Resident Status Source: NY Dept. of Taxation, Frequently Asked Questions about Filing Requirements, Residency, and Telecommuting Source: NY Dept. of Taxation, Income Tax Definitions Source: Mass.gov, Personal Income Tax for Nonresidents Source: NJ Division of Taxation, Income Tax - Nonresidents Source: NJ Division of Taxation, Part-Year Residents and Nonresidents Understanding Income Tax (GIT-6)

Alaska does not impose a state income tax on estates or trusts. The state repealed its income tax on fiduciaries (estates and trusts) in 1980, the same legislation that eliminated the personal income tax on individuals. Prior to 1980, Alaska imposed tax on fiduciaries under AS 43.20.033 ("Taxable income of fiduciaries, nonresidents, and part-year residents") and AS 43.20.035 (same subject), but both provisions were repealed by Section 10, Chapter 1, Special Session of the Alaska Legislature, 1980, effective January 1, 1980. Those sections have not been reenacted.

Current law

The Alaska Net Income Tax Act at AS 43.20 continues to impose tax on corporations under AS 43.20.011, but the operative tax-imposition sections that applied to trusts and estates were repealed in 1980. Because the fiduciary-income-tax sections were repealed and not replaced, Alaska law imposes no state income tax on trust or estate income.

Federal filing requirements remain

Trusts and estates remain subject to federal income tax. A trust or estate must file federal Form 1041 if it has taxable income or gross income of $600 or more during the tax year, regardless of Alaska's treatment. Alaska law does not require a separate state fiduciary return because Alaska imposes no tax on fiduciaries.

Alaska as a trust situs

Because Alaska imposes no income tax on trusts, it is frequently chosen as a trust situs for estate-planning purposes. Alaska also enacted favorable trust statutes in 1997 and later years, including authorization for self-settled spendthrift trusts (domestic asset protection trusts), perpetual trusts, and community property trusts. The absence of state income tax on accumulated trust income is a key feature for long-term trust planning.

Liability in other states

A trust with an Alaska trustee or Alaska situs may still owe income tax to another state if that state's law classifies the trust as a resident or sources income to the state. The relevant Alaska statutes address only Alaska's own tax; they do not govern or limit another state's authority to tax a trust based on grantor domicile, beneficiary residence, trustee location, place of administration, or source income. States apply varying criteria to determine fiduciary income tax nexus, and practitioners should evaluate each relevant state's rules independently.

Source: Alaska Legislature, History of Alaska Individual Income Tax (session 30, doc. 17151)

California and New York law both generally treat the Alaska Permanent Fund Dividend (PFD) as taxable income for their state personal income tax purposes for residents and part-year residents. Primary sources from both state tax authorities specify that the PFD should be reported as "Other Income" or included with dividends, without exclusion or specific credit for the PFD. Massachusetts and Arizona primary authority—statutes, regulations, and DOR administrative publications reviewed as of June 2026—do not address the PFD specifically, and no exclusion or unique reporting provision was located in the personal income tax law, nonresident/part-year instructions, or taxability matrices for those states.

California: The California Franchise Tax Board (FTB) instructs that "Alaska Permanent Fund dividends" are a taxable category of "Other Income." Table 2 of FTB Publication 737 states this explicitly for both full-year and part-year residents. The publication (tax year 2024, published 2025) directs inclusion of the PFD as Other Income via Schedule 1 (Form 1040), line 8g. No unique PFD exclusion, credit, or specific reporting requirement appears in California’s tax law or guidance as of June 2026.

New York: New York statutes and Department of Taxation guidance do not reference the Alaska PFD specifically but require all dividend income earned while a resident (including during part-year residency) to be reported. The IT-203 (2024 instructions, published early 2025) directs part-year residents to include dividend income (including payments received while a New York resident) in the "New York State amount" column. No exclusion or unique reporting for the PFD is provided. For nonresidents, only New York-source income is taxed; PFDs are not New York-source, so are not taxed for nonresidents.

Massachusetts and Arizona: A review of current Massachusetts and Arizona personal income tax statutes, regulations, 2025 DOR forms and instructions, and administrative guidance as of June 2026 found no mention of the Alaska Permanent Fund Dividend or its state tax status for residents or part-year residents. Unable to confirm as of 2026-06-22.

Source support: Source: FTB Publication 737 (2025), Table 2, p. 5 and summary for line 8g, tax year 2024 Source: New York State Department of Taxation and Finance, IT-203-I: Instructions for Form IT-203 (tax year 2024, published 2025)

Not yet human confirmed. Massachusetts and Arizona guidance could not be confirmed from primary statute or regulation as of 2026-06-22. Updates will be published if future DOR or legislative guidance addresses PFDs specifically.

Alaska law strictly prescribes the order and types of involuntary deductions (garnishments, attachments, and offsets) that may be taken from a recipient’s Alaska Permanent Fund Dividend (PFD). This order is governed by Alaska Statutes § 43.23.065 and expanded in the Alaska Administrative Code (15 AAC 23.213, effective July 4, 2026). The order of deduction is also reflected and enforced by the Alaska Department of Revenue, PFD Division.

Order of Deduction Priority (as of July 4, 2026):

• IRS Backup Withholding (24%; no $2 fee)
• $2 Attachment Fee (charged per deduction/garnishment unless otherwise noted)
• Bankruptcy (as per 15 AAC 23.213(g))
• Child Support Services enforcement orders
• Court-ordered Restitution
• Internal Revenue Service tax levies
• Postsecondary Education (e.g. University of Alaska debts)
• Court-ordered Fines
• Writs (AS 09.35, including minor/child judgments)
• State Agency debts (including University, various agencies)
• Department of Revenue (Collections)
• Domestic Violence restitution
• Unpaid Rent or Damages (municipal or public housing claims)
• Court-ordered Forfeiture
• Government Agency Assignments (pre-1999 only)
• Other Writs/Levies (80% unless otherwise ordered by court)
• Alaska 529 Plan deduction (up to 50% of balance; no $2 fee)
• Charitable Contributions to eligible organizations (no $2 fee)
• Education Raffle (no $2 fee)

Only obligations specifically authorized and in this statutory/regulatory order may be satisfied from the PFD. Private debt garnishments outside these categories are not permitted. The list is exhaustive and strictly enforced: no creditor other than those listed (and in this order of priority) may garnish or attach a PFD.

IRS Backup Withholding vs. Federal Tax Levy:

• IRS backup withholding (24%) is processed without the $2 state fee and is a federal requirement if valid taxpayer information is not provided or if the individual is subject to IRS notice.
• IRS federal tax levies (for taxes owed) are separate and prioritized after court-ordered child support, restitution, and bankruptcy deductions.

Procedural Protections:

• Recipients must be provided with written notice of pending deductions, and statutory procedures exist for objections and contesting attachments (see AS 43.23.065 and 15 AAC 23.213).
• There is no fixed “minimum protected amount”; the entirety of the PFD is subject to deductions as authorized above.

Recent Change:

• 15 AAC 23.213 (regulatory procedure) was amended effective July 4, 2026, further codifying and detailing this priority order and process, but the statutory categories in AS 43.23.065 remain controlling.

Source: Alaska Statutes § 43.23.065 Source: Alaska Department of Revenue, PFD Division – Deductions Source: Alaska Administrative Code 15 AAC 23.213 (filed June 4, 2026, eff. July 4, 2026)

While Alaska does not impose a personal income tax on individuals, it employs statutory definitions of residency and domicile for other purposes, including the Alaska Permanent Fund Dividend (PFD), university tuition, and eligibility for various state benefits. Practitioners advising clients on Alaska domicile must be familiar with these definitions, as they affect eligibility for critical state programs and benefits—especially when individuals are moving to Alaska from a taxing state or seeking to establish residency for Alaska-specific statutory purposes.

Permanent Fund Dividend (PFD) Residency The Alaska Permanent Fund Dividend, governed by Alaska Statutes Title 43, Chapter 23 (AS 43.23), sets out a specific definition of residency for dividend eligibility:

• Under AS 43.23.095(7), an "Alaska resident" is defined as "an individual who is physically present in the state with the intent to remain indefinitely and to make a home in the state."
• The law enumerates a set of allowable absences, found in AS 43.23.008, and specifies documentation and intent criteria. Eligibility for the PFD typically requires that the individual: (a) has been a resident for the entire qualifying period; (b) has not claimed residency in another state or country; and (c) intends to remain in Alaska indefinitely.
• The regulations (15 AAC 23) elaborate on acceptable evidence of residency, including housing, employment, voter registration, Alaska driver's license, and other ties. Individuals absent from Alaska for more than 180 days must generally document allowable absences to remain eligible for the PFD.

Other Statutory Definitions Alaska statutes use similar or identical definitions of residency for other legal purposes, such as:

• Tuition and university residency status under AS 14.43.145 uses "domicile" in Alaska as a basis for in-state tuition eligibility at the University of Alaska. Domicile requires physical presence and intent to remain, with regulations specifying factors considered by the university.
• Voter registration and eligibility draws on the standard of permanent physical presence and intent to remain found in the Alaska election code (AS 15.05.020), requiring applicants to demonstrate evidence of actual residency.

Summary While the concept of Alaska residency/domicile no longer carries income tax consequences for individuals, statutory definitions remain crucial for numerous state-administered benefits and programs. The definition for the Permanent Fund Dividend—as an individual physically present in Alaska with intent to remain indefinitely—is the standard practitioners most frequently rely upon for substantiating state ties in the absence of income tax law.

Source: AS 43.23.095(7) Source: AS 43.23.008 Source: AS 14.43.145 Source: AS 15.05.020

The Alaska Permanent Fund Dividend (PFD) is fully taxable for federal income tax purposes, regardless of the state's lack of personal income tax. The Internal Revenue Service (IRS) specifically instructs that Alaska PFD payments must be reported as "Other income" on federal tax returns, not as dividends: the IRS guidance states, “Do not report the dividend received from the Alaska Permanent Fund on Schedule B (Form 1040 or 1040-SR). Instead, report it on Schedule 1 (Form 1040 or 1040-SR), line 8g.”

Federal reporting requirements:

• Each year, the Alaska Permanent Fund Dividend Division issues IRS Form 1099-MISC to PFD recipients. All recipients—regardless of status as residents, part-year residents, or others eligible for the payment—must report the total PFD amount as taxable income, following the IRS requirement to include it on Schedule 1 (Form 1040 or 1040-SR), line 8g.
• When a child receives a PFD, the income is generally subject to the federal "kiddie tax"—unearned income for children over a threshold is taxed at the parent's rate per the instructions for IRS Form 8615.

Backup withholding and Alaska administration:

• The IRS requires 24% backup withholding on PFD payments if a recipient fails to provide a correct taxpayer identification number or is subject to backup withholding by IRS notice. The Alaska PFD Division, responsible for administering payments, withholds this amount when required and notes it on the recipient's 1099-MISC. The division also assesses a $2 processing fee for payments subject to any deduction or withholding; this fee is a PFD Division administrative practice, not a federal requirement.

Not classified as a dividend:

• IRS and Alaska administrative guidance make clear that the PFD is not considered a dividend for federal income tax purposes. It must not be reported on Schedule B, but on Schedule 1, line 8g, as “Other income.”

Source: IRS, Clarification about Alaska Permanent Fund Dividends Source: Alaska Department of Revenue, PFD Division – Tax Information

Alaska does not impose a personal income tax on individuals, as established under AS 43.20. However, Alaska residents may still incur income tax filing obligations with other states as nonresidents if they receive income sourced to those states (such as wages for work performed, rental income, business income, or partnership income from outside Alaska). The personal income tax filing requirements and liabilities for these out-of-state earnings are governed entirely by the tax law of the other state(s), not by Alaska law.

Filing obligations in other states:

• If an Alaska resident earns income in a state with a personal income tax, that state's rules determine whether a nonresident return must be filed and whether income tax is due. Most states impose filing requirements for nonresidents with income sourced to that state regardless of the individual's state of residence.
• Alaska itself imposes no personal income tax on its residents' worldwide income and, therefore, has no provision for allowing a credit for taxes paid to other states. There is likewise no mechanism in Alaska law that offsets, compensates, or relieves the obligation to pay nonresident state income tax imposed by another state. This is not addressed affirmatively in Alaska statute, but follows as a direct result of the repeal of Alaska's individual income tax and absence of resident income taxation since 1980.

No Alaska-based relief or credit mechanism:

• AS 43.20, which codifies the Alaska Net Income Tax Act, now applies solely to corporations (AS 43.20.011). All provisions relating to individual taxation were repealed effective 1980, and there is no Alaska statute, regulation, or Department of Revenue authority providing for resident relief against out-of-state income taxes.

Summary

• Alaska residents must comply with all nonresident filing and income tax obligations for out-of-state earnings under the tax law of each relevant state. Alaska does not impose an individual income tax, provides no tax credit for income tax paid to another state, and does not regulate or relieve nonresident income tax obligations imposed by other jurisdictions.

Source: AS 43.20.011 Source: Alaska Legislature, History of Alaska Individual Income Tax

Direct answer: As of June 2026, no legislative proposal to reimpose a state-level personal income tax in Alaska has been enacted, and the statutory prohibition on municipal income taxes remains in force. Multiple bills proposing a state personal income tax or similar head tax have been introduced since 2020 but have stalled or failed in committee. No legislation is currently scheduled to take effect for the 2026 or forthcoming tax years.

Why: Alaska repealed its individual income tax in 1980. Since 2020, renewed concern over state fiscal deficits and declining oil revenue has prompted several legislative introductions, but none have succeeded. HB 156 (2023, 33rd Legislature) and HB 152 (2025, 34th Legislature) were serious proposals: HB 156 would have imposed a personal income tax (including withholding from Permanent Fund Dividends), while HB 152 proposed a hybrid head tax with a surtax on higher incomes. Both failed to advance to floor passage. No companion or alternative bills advanced in Senate committees.

Alaska Statutes § 43.20.290 continues to prohibit all cities and boroughs from levying a personal income tax. No proposal to repeal that prohibition has advanced out of committee or reached a legislative vote since 2020. The statutory language by itself has not changed since 1961.

Source support:

• Bill histories and full texts for HB 156 and HB 152 are published and searchable on the official Alaska Legislature website (akleg.gov), showing committee action, hearing dates, and bill status. Committee minutes and bill tracking logs confirm both bills stalled or remain pending as of June 2026.
• The current statute prohibiting municipal income taxation is codified at AS 43.20.290. The Alaska Legislative Affairs Agency’s online statutes and the bill tracking history show no amendments or committee-approved proposals affecting this section since at least 2020.

Caution / review status: Not yet human confirmed. Pending session updates should be checked if new bills are filed after June 2026.

Source: AS 43.20.290 Source: Alaska Legislature, Bill History for HB 156 (33rd Legislature) Source: Alaska Legislature, Bill History for HB 152 (34th Legislature)