🏔️ Alaska Income Tax Calculator 2025

NO State Income Tax | 0% Tax Rate | Plus Annual PFD!

0% Income TaxPermanent Fund DividendTax-Free

✅ Alaska Has NO State Income Tax!

Great News: Alaska does NOT tax wages, salaries, or most income. You pay $0 in state income tax!

  • No tax on wages/salaries
  • No tax on retirement income
  • No tax on Social Security
  • No tax on capital gains
  • BONUS: Annual Permanent Fund Dividend (PFD) payments to residents!

Your Alaska Income Tax: $0

💰 Alaska's Unique Advantage: Permanent Fund Dividend (PFD)

Annual Cash Payment to Residents

Alaska doesn't just have $0 income tax - it actually PAYS residents! The PFD is an annual dividend from oil revenue invested in the Alaska Permanent Fund.

  • 2024 PFD: $1,312 per person
  • 2023 PFD: $1,312 per person
  • Eligibility: Alaska residents who lived in state full previous year
  • Example Family of 4: $5,248 annual payment!

Combined Benefit: $0 income tax + PFD payment = significant savings!

💵 Tax Trade-Offs

⚠️ Higher Cost of Living

While Alaska has no income tax + PFD, there are trade-offs:

  • High living costs: Food, gas, goods cost 30-50% more (shipping to Alaska)
  • Property tax: Varies by municipality, generally moderate
  • Sales tax: No state sales tax, but local sales taxes up to 7.5%
  • Extreme weather: Harsh winters, limited daylight, isolation

Best For: High earners, remote workers, outdoor enthusiasts, oil industry workers

🎓 Alaska Tax FAQs

Will Alaska ever add an income tax?

Possible but unlikely. Alaska's constitution allows income tax with voter approval. Last attempt was 1980 (voters rejected). State relies on oil revenue + PFD fund.

How does Alaska fund government without income tax?

Alaska relies on: (1) Oil production taxes/royalties, (2) Federal funding, (3) Investment earnings from Permanent Fund, (4) Local property/sales taxes.

Is the PFD taxable?

The PFD is taxable as income on your federal return but NOT on Alaska state taxes (no state income tax). Report it on federal Form 1040.

Do I need to file an Alaska state tax return?

No! Alaska has no income tax, so there's no state tax return. You only file federal taxes.