Alaska Retirement Income Tax Guide for Seniors
No. Alaska has no state income tax and no statewide sales tax. Older residents also get a mandatory property tax exemption, the yearly Permanent Fund Dividend, and for those with low incomes, a monthly Senior Benefits payment.
No. Alaska taxes no income, so Social Security, pensions and retirement account withdrawals are untaxed by the state, and there is no state sales tax. Local governments may charge sales or property tax. Where property tax applies, state law exempts the first $150,000 of assessed value of the home of a resident 65 or older. Low-income seniors can also get $125 to $250 a month through the state Senior Benefits Program.
A state with almost no state taxes on individuals
Alaska repealed its personal income tax in 1980 and has no statewide sales tax. For a retiree, that means Social Security, pensions (including military and federal), IRA and 401(k) withdrawals, annuities and investment income are not taxed by the state. The Social Security tax calculator handles the federal side.
What you do pay depends on where you live:
- Local sales tax: many cities and boroughs charge one, and rates and exemptions vary widely. Anchorage has no general sales tax; Juneau and many smaller communities do. Some offer seniors a sales tax exemption card, so ask your city clerk.
- Local property tax: charged by organized boroughs and cities. Large parts of the state have none.
- Estate and inheritance tax: none.
The $150,000 senior property tax exemption
Unlike most states, where senior exemptions are optional, Alaska requires every municipality that taxes property to exempt the first $150,000 of assessed value of a qualifying senior's primary residence (AS 29.45.030(e)). It covers:
- Residents 65 or older who own and live in the home as their primary residence.
- Disabled veterans with a service-connected disability of 50% or more.
- A widow or widower who is 60 or older and was married to a person who qualified.
There is no income test. Municipalities may give more than $150,000, and some do. You apply to your local assessor, and each municipality sets its own deadline and rules. In Anchorage, for example, the deadline is March 15, you must turn 65 before January 1 of the exemption year, and you must have been an Alaska resident for the previous full year.
What it is worth
For a home assessed at $400,000, the exemption removes $150,000, so tax is figured on $250,000. At a combined local rate of 15 mills (an illustration; rates differ by community), that cuts the yearly bill from $6,000 to $3,750, a saving of $2,250.
The Permanent Fund Dividend
Every eligible resident, at any age, receives a yearly dividend from the Alaska Permanent Fund. The amount changes each year and is set by the Legislature. Alaska does not tax it, but it is taxable income on your federal return. You must apply each year, generally between January 1 and March 31, and meet the residency rules, including limits on time spent outside the state. Retirees who spend winters elsewhere should check the absence rules before leaving.
Senior Benefits Program: monthly cash for low-income seniors
The Alaska Department of Health pays monthly cash to residents 65 or older with low incomes. Assets are not counted. Payments are $250, $175 or $125 a month, depending on income. The income limits follow the federal poverty guidelines for Alaska and change each year. Under the limits in effect from April 1, 2025, a single senior with gross income up to $34,213 a year, or a couple up to $46,253, could qualify for at least the $125 payment. Payments depend on state funding, and people living in nursing homes, the Pioneer Homes or the Alaska Veterans and Pioneers Home are not eligible.
| Monthly payment | Single, yearly income up to | Married couple, up to |
|---|---|---|
| $250 | $14,663 | $19,823 |
| $175 | $19,550 | $26,430 |
| $125 | $34,213 | $46,253 |
Limits shown are those effective April 1, 2025, from the program fact sheet updated January 2026. Check with the Division of Public Assistance for the current year.
Cost of living is the real tax
Low taxes do not make Alaska cheap. Heating, groceries, shipping and air travel cost more than in most of the country, especially off the road system. Medicare Advantage plan choices are limited in much of the state, and many seniors rely on Original Medicare with a supplement. If you are moving north for the tax picture, price heating fuel and health care for the specific community.
See how Alaska compares in our state retirement income tax finder and the senior property tax exemption guide.
Frequently Asked Questions
Does Alaska tax Social Security or pensions?
No. Alaska has no personal income tax, so no retirement income is taxed by the state.
How much is the Alaska senior property tax exemption?
State law requires municipalities that levy property tax to exempt the first $150,000 of assessed value of the primary residence of a resident 65 or older, a disabled veteran rated 50% or more, or a qualifying widow or widower 60 or older. Local governments may exempt more.
Is the Permanent Fund Dividend taxable?
Alaska does not tax it, but the IRS treats it as taxable income on your federal return.
Does Alaska have a sales tax?
There is no state sales tax. Many cities and boroughs charge a local sales tax, and some give seniors an exemption.
What is the Alaska Senior Benefits Program?
A state program that pays $125, $175 or $250 a month to Alaskans 65 or older with low incomes. Assets do not count. Apply through the Department of Health, Division of Public Assistance.
Sources: Alaska Statutes 29.45.030 and the Alaska Division of Community and Regional Affairs on property tax exemptions; Municipality of Anchorage 2026 senior exemption application; Alaska Department of Health Senior Benefits Program fact sheet (updated January 2026). Read October 2026. This page is general information, not tax advice, and is not affiliated with the State of Alaska or the IRS. Confirm details with your local assessor or the Division of Public Assistance. See our Data Sources page for how we source figures.