Alaska State Income Tax Withholding

Last Updated: January 2026

Overview

Alaska does not impose a state income tax on individuals. The state repealed its income tax in 1980 due to oil revenue surpluses. Alaska is one of nine states with no state income tax.

2026 Tax Rates

No State Income Tax

Alaska has no individual income tax, so there is no withholding requirement for state income taxes.

Deductions and Exemptions

Not applicable. Alaska does not tax individual income.

Special Considerations

No Withholding Required

Employers in Alaska are not required to withhold state income tax from employee wages.

Alaska Permanent Fund Dividend

While not a payroll consideration, Alaska residents may receive an annual Permanent Fund Dividend (PFD) from oil revenues. This is taxable on the federal return but not subject to state income tax.

Employees Working in Multiple States

If an Alaska-based employee performs work in states with income tax, withholding may be required for those states based on wages earned there.

Local Taxes

Some Alaska municipalities impose local sales taxes, but there are no local income or payroll taxes.