Alaska Tax Benefits for Residents and Immigrants in 2025–26

(ALASKA) If you’re moving to Alaska for a new job, seasonal work, school, or to start a business, your tax life will feel different fast. Alaska has no state personal income tax and no statewide sales tax, which can make paychecks stretch further than in many other parts of the United States 🇺🇸. But that doesn’t mean “no taxes.” Alaska still allows cities and boroughs to charge their own local taxes, and it keeps a corporate income tax that can reach a top marginal rate of 9.4% for C corporations with Alaska-source income. For immigrants and temporary workers, the main task is simple: plan for federal tax first, then check local tax rules where you live and shop, and confirm whether your business structure triggers Alaska corporate filings.

The first week in Alaska: paycheck changes and why they matter

For employees, the most immediate change is what you don’t see. Because Alaska does not tax individual income, there is no Alaska state income tax withholding taken out of wages.

This applies broadly, including new permanent residents (green card holders), refugees and asylees who are authorized to work, and many temporary workers and students with work permission. You still owe federal income tax, and your employer still withholds for federal tax, Social Security, and Medicare.

Practical move during your first week: read your first Alaska paystub and make sure you don’t assume “no state tax” means “no tax at all.”

Step-by-step: the 2025–26 process for a new arrival

This is the full journey most newcomers follow, with realistic timeframes and what to expect at each stage.

1. Days 1–7: Confirm your work authorization and keep clean copies for payroll
   • Employers usually ask for identity and work-authorization documents shortly after you start.
   • Keep secure copies of what you used, plus your immigration paperwork (visa stamps, approval notices, and work cards).
   • If you need to apply for or renew an Employment Authorization Document (EAD), start with USCIS Form I-765, Application for Employment Authorization.
   • Even though Alaska doesn’t tax individual income, good records protect you when you switch jobs, extend status, or apply for benefits.
2. Days 1–14: Set expectations—there is no Alaska income tax return to file
   • In 2025–26, you generally do not file an Alaska state return for wages, self-employment income, or investment income.
   • Alaska does not tax individual income at the state level, so there is no Alaska state income tax return.
   • There is no minimum income threshold—earning $1,000 or $1,000,000 makes no difference for Alaska individual income tax: the state tax is still zero.
   • Note: this simplicity can hide other costs that show up through local taxes.
3. Weeks 2–4: Decide where you live by comparing local tax costs
   • Because Alaska has no statewide sales tax, shopping costs depend on your city or borough.
   • Some places have no local sales tax; others add a noticeable percentage to everyday purchases.
   • Example: Anchorage is 0.0% for sales tax—no city, borough, or state sales tax—while many other communities charge rates that vary seasonally or by jurisdiction.
   • Choosing where to live should include local tax rules that affect groceries, supplies, and daily spending.
4. Month 1: Seasonal workers — plan for home-state taxes
   • “No Alaska income tax” doesn’t always end the story. Your previous state may still claim tax on earnings depending on its residency rules.
   • Alaska does not tax wages even if you’re only in Alaska part of the year, but you may need to file part-year or nonresident returns elsewhere.
   • Many seasonal workers lose time and money by planning for Alaska only and forgetting their home state obligations.
5. Month 1–2: Learn the Permanent Fund Dividend (PFD) rules
   • Alaska residency matters for programs like the Permanent Fund Dividend (PFD) even though it doesn’t affect an income tax return.
   • To generally qualify, you must:
     • intend to remain in Alaska indefinitely,
     • not claim residency in another state,
     • meet physical-presence rules, including being in Alaska at least 72 consecutive hours during the qualifying year (with limits on allowed absences).
   • The PFD application window is January 1 through March 31 each year.
   • Many immigrants treat the PFD like a tax refund, but it is a separate benefit program with its own proof requirements.
6. Ongoing: Track local sales taxes the same way you’d track state tax elsewhere
   • Local sales tax rates vary widely — many locations fall in an approximate 0% to 7.5% range, with some combined rates reaching about 9.5%.
   • Seasonal examples:
     • Sitka: 6% Apr 1–Sep 30, 5% Oct 1–Mar 31
     • City of Ketchikan: 8% Apr 1–Sep 30, 5.5% Oct 1–Mar 31
     • City of Saxman: 6.5% (no seasonal split noted)
   • You don’t need to memorize rates; ask what applies where you live and shop.
7. Any time you start a business: determine if you will face Alaska corporate income tax
   • Alaska’s corporate income tax generally applies to C corporations with Alaska-source income.
   • The tax is graduated from 0% to 9.4%. A commonly cited bracket structure:
     • 0% on the first $25,000
     • 2% between $25,000 and $49,000
     • Up to 9.4% once taxable income exceeds $222,000
   • Many pass-through entities (S corporations, partnerships, LLCs taxed as partnerships) typically do not pay Alaska corporate tax at the entity level; income passes to owners and they pay federal tax (but still not Alaska individual income tax).

The business compliance path: filings, deadlines, and expectations

If you run a C corporation with Alaska-source income, Alaska expects a corporate return.

• Main filing: Form 6000 – Alaska Corporation Net Income Tax Return.
• Due date: 30 days after the federal corporate income tax return due date (including extensions).
• Estimated payments: required when a corporation expects to owe more than $500 for the year, with quarterly due dates aligned to federal estimated payment quarters.
• Multi-state/multinational groups may need apportionment schedules.
• Corporations typically attach a copy of federal Form 1120 (or other relevant federal return) plus supporting schedules.

Real-life implication: many immigrant founders focus on investor preferences or home-country advice, then later discover that while individuals enjoy simple treatment in Alaska, C corporations can face significant state-level tax bills.

Key takeaway: Alaska’s system is simple for individual wages but not always simple for business owners — especially C corporations with Alaska-source income.

Remote sellers and online shops: local tax reach

Alaska’s lack of statewide sales tax does not mean online businesses can ignore Alaska addresses.

• The Alaska Remote Seller Sales Tax Commission (ARSSTC) coordinates local sales tax collection for remote sellers and marketplace facilitators.
• Economic nexus threshold: $100,000 in Alaska sales or 200 transactions in the prior or current year.
• Once the threshold is met, a seller has 30 days to start collecting local sales tax in participating jurisdictions where it has customers.
• This rule affects immigrant entrepreneurs selling online from outside Alaska and Alaska-based founders shipping into multiple local tax areas.

Records you should keep: what replaces the “state tax return” paper trail

Because Alaska has no personal income tax return, newcomers sometimes lose the habit of keeping organized tax records. Don’t.

Keep the following federal- and residency-related documents:

• W-2s, 1099s, and your federal tax return
• Proof of Alaska residency for programs like the PFD:
  • Lease or deed
  • Utility bills showing an Alaska address
  • Alaska driver’s license or state ID
  • Employment records from Alaska employers
• Immigration documents: green card, EAD, visa stamps
• For businesses:
  • Corporate records
  • Copies of the federal return attached to Alaska filings
  • Estimated payment records if you expect to owe more than $500
  • Local sales tax registration and returns where required

What most newcomers get wrong — and the simple fix

The most common mistake is treating Alaska as “tax-free” and then getting caught by:

• Local sales taxes
• Local property taxes
• The state’s high-end corporate tax system

The simple routine to avoid problems:

1. Confirm your paycheck has no state withholding (and that federal withholding is correct).
2. Plan your federal taxes carefully.
3. Ask your city or borough about local sales and other local taxes.
4. Decide early whether your business structure could trigger Alaska corporate income tax (rates up to 9.4%).

Follow those steps and you’ll avoid the common traps that surprise many newcomers.