No state income tax
How Alaska taxes retirement income
Alaska has no personal income tax, so the state takes nothing from your Social Security, your pension or your withdrawals from a 401(k), 403(b), 457(b) or IRA. That holds no matter where the pension comes from: a Alaska plan, another state’s teacher system, a company pension or the federal government.
Alaska also has no statewide sales tax, though many cities and boroughs charge their own, and residents receive the yearly Permanent Fund Dividend. Property taxes are set locally, and many communities offer exemptions for homeowners 65 and older.
Federal income tax still applies everywhere. Your pension and traditional retirement account withdrawals are taxed by the IRS as ordinary income, and up to 85% of your Social Security can be taxable federally depending on your other income.
Questions
Does Alaska tax pensions?
No. Alaska has no personal income tax, so pensions of every kind are free of state tax.
Does Alaska tax Social Security?
No. With no income tax, Social Security benefits are not taxed by the state.
If I move to Alaska, can my old state still tax my pension?
No. Federal law (4 U.S.C. 114) bars states from taxing the pension income of people who no longer live there, including government pensions and most retirement plan payments.