Alaska residents have some of the lowest tax burdens in America. It’s estimated that residents of the state give over 4.6 percent of their income to taxes, which is significantly lower than the national average of more than 16 percent. That’s because Alaska doesn’t have an individual state income tax, and employers don’t withhold Alaska state taxes from paychecks. Instead, the state rewards legal residents for living there by paying an annual dividend called the Alaska Permanent Fund Dividend. Governor Dunleavy proposes a generous $3,000+ based on the PFD formula. The legislature might favor a more cautious approach, closer to the 2023 amount of $1,312.
Alaska does impose a corporate income tax, with rates ranging from 0% to 9.4%. It also imposes local sales taxes through its boroughs (the Alaska equivalent of counties) and municipalities, which can reach as high as 7.5%.
Alaska Permanent Fund Dividend Application
The 2024 Alaska Permanent Fund Dividend (PFD) is currently in the application stage, with some key points to remember:
Application:
- Open: January 1, 2024
- Deadline: March 31, 2024
- Methods: Apply online at pfd.alaska.gov or paper applications available at distribution centers.
Choose online convenience at pfd.alaska.gov: https://pfd.alaska.gov/ or pick up a paper application at distribution centers across the state. Before diving in, gather documents proving your Alaskan residency throughout 2023. Double-check eligibility requirements at pfd.alaska.gov. Apply online with your MyAlaska account for a smooth and secure experience.
Alaska PFD Eligibility
To be eligible for the PFD, you must be an Alaska resident and have lived in the state for at least one full calendar year during the application period. You must also be a U.S. citizen or permanent resident alien.
There are a few other eligibility requirements, such as not being incarcerated for a felony conviction during the previous year. You can find more information about eligibility on the Permanent Fund Dividend Division website: https://pfd.alaska.gov/eligibility/eligibility-requirements. Here is the summary of Alaska PFD Eligibility:
Resident requirement: You must have been an Alaskan resident for all of 2023, meeting specific rules about physical presence and intent to remain.
Legal standing: No felony convictions or incarcerations during the qualifying year.
Time out of state: There are exceptions for certain absences, but generally being outside Alaska for more than 180 days disqualifies you.
How to Calculate the Alaska PFD Amount?
- The PFD amount is not fixed and varies each year based on a formula outlined in Alaska Statute 43.23.030.
- The formula considers two main factors:
- Statutory net income: This is a five-year average of the Alaska Permanent Fund’s earnings from its investments.
- Number of eligible applicants: The more applicants, the smaller the individual share.
- After the amount is determined, it’s divided equally among all eligible applicants.
- Payments are typically made in the fall, either by direct deposit, check, or debit card.