Alaska stands in a category of its own for military retirees: no state income tax at all. Every dollar of military retirement pay, VA disability compensation, TSP distributions, and Survivor Benefit Plan annuities is fully untaxed at the state level. That single advantage makes Alaska one of the most financially favorable states in the country for veterans to establish residency — and the state adds a substantial package of property tax exemptions, education benefits, land purchase discounts, and recreation privileges on top of it.
Alaska is home to approximately 68,000 veterans and maintains significant military infrastructure including Joint Base Elmendorf-Richardson (JBER) near Anchorage, Fort Wainwright near Fairbanks, Eielson Air Force Base, and Clear Space Force Station.
USMilitary.org is an independent educational resource, not affiliated with the Alaska Office of Veterans Affairs, the VA, or any government agency. For official benefit information, visit veterans.alaska.gov.
- Alaska has no state income tax — military retirement pay, active duty pay, TSP distributions, SBP annuities, and VA disability compensation are all untaxed at the state level
- Disabled veterans with a 50% or higher service-connected rating are exempt from property taxes on the first $150,000 of their home’s assessed value
- Alaska National Guard members receive 100% tuition and fees covered at state institutions for up to 36 credit hours per fiscal year
- Alaska residents receive an annual Permanent Fund Dividend (PFD) — veterans who meet residency requirements qualify alongside all other Alaska residents
- Veteran residents receive a one-time discount on state land purchases and may purchase up to five years of credit toward Alaska state retirement
- Disabled veterans can travel at half price on the Alaska Marine Highway System year-round between Alaskan ports
- Income Tax Benefits
- Property Tax Exemptions
- Education Benefits
- Employment and Career Benefits
- Veterans Land Discount
- Alaska Permanent Fund Dividend
- Hunting, Fishing, and Recreation
- Transportation Benefits
- Veterans Home and Cemetery
- Surviving Spouse Benefits
- How to Access Alaska Veteran Benefits
- Frequently Asked Questions
Income Tax Benefits
No State Income Tax
Alaska does not levy a general state income tax on individuals. Residents are not required to file a state income tax return. This blanket exemption covers all forms of military compensation and retirement income without exception:
- Military retirement pay — fully untaxed
- Active duty pay — fully untaxed
- TSP distributions — fully untaxed
- VA disability compensation — untaxed (also federally exempt)
- Military Disability Retirement Pay — untaxed
- Survivor Benefit Plan (SBP), RCSBP, and RSFPP annuities — fully untaxed
- Dependency and Indemnity Compensation (DIC) — untaxed
Alaska also has no statewide sales tax, though 62 municipalities impose local sales taxes ranging from 2% to 7.5%, with a current average around 1.89%.
Property Tax Exemptions
Disabled Veteran Exemption — First $150,000 of Assessed Value
Veterans with a service-connected disability rating of 50% or higher are exempt from property taxes on the first $150,000 of the assessed value of their primary residence in Alaska. To qualify:
- 50% or higher service-connected disability rating from the VA
- Alaska resident, primary residence
- Honorably discharged
The exemption transfers to a surviving spouse if the veteran passes away, provided the spouse is at least 60 years of age. The surviving spouse retains the exemption until they remarry or no longer meet residency requirements.
Property tax rates vary by municipality — in Anchorage, the property tax rate is approximately 1.3%, meaning the $150,000 exemption saves approximately $1,950 per year. In Fairbanks, rates are higher and savings proportionally greater.
Municipal Exemptions
Individual Alaska municipalities may offer additional property tax exemptions or reductions for veterans beyond the statewide program. Contact your local borough or city assessor’s office to verify what additional relief may be available in your specific municipality.
Education Benefits
Alaska National Guard Tuition Assistance — Up to 100%
The Alaska State Tuition Assistance Reimbursement Program provides Alaska National Guard and Alaska Naval Militia members with 100% of tuition and required fees at approved colleges, universities, and technical/vocational schools. Benefits include:
- Up to 36 credit hours per fiscal year
- Covers undergraduate and graduate degrees at state institutions
- Covers trade and vocational credentials
- Can be combined with federal financial aid
- Members may earn one credential per academic level (certificate, associate, or bachelor’s degree)
Free Tuition for Surviving Spouses and Dependents
Spouses and dependents of resident service members who died in the line of duty, from service-related causes, or who are POW/MIA are eligible for a waiver of undergraduate tuition and fees at Alaska public institutions. Recipients must maintain good academic standing to continue receiving the waiver.
In-State Tuition for Service Members and Dependents
Active duty service members stationed in Alaska and their dependents are eligible for in-state tuition rates at Alaska state institutions regardless of their official state of legal residence. This eliminates the out-of-state tuition surcharge for military families pursuing higher education while assigned to Alaska.
Employment and Career Benefits
State Employment Preference
Alaska provides veteran preference points for state employment. Veterans who served on active duty or in a reserve component receive 5 preference points, and veterans with a service-connected disability receive 10 preference points. These points are added to the applicant’s score in competitive hiring processes for state positions.
Alaska Public Employees Retirement System (PERS) Military Credit
Veterans employed in Alaska state government may purchase up to five years of additional credit under the Alaska Public Employees’ Retirement System for active duty military service. Key details:
- Requires honorable discharge and PERS vesting
- Cost: 8.5% of the member’s annualized vesting-year salary for each year of military credit claimed
- Military credit counts toward monthly benefit calculation — not toward retirement eligibility
Veterans Land Discount
Alaska resident veterans receive a one-time discount on the purchase of state land. This benefit is available to Alaska residents who served honorably and are established Alaska residents. The discount is applied to competitive and over-the-counter land sales through the Alaska Division of Mining, Land, and Water. Contact the Alaska Department of Natural Resources for current discount amounts and eligible parcels. Learn more about the program at dnr.alaska.gov.
Alaska Permanent Fund Dividend
The Alaska Permanent Fund Dividend (PFD) is an annual cash payment made to Alaska residents from investment earnings of the state’s oil wealth fund. Veterans who are legal Alaska residents qualify for the PFD alongside all other Alaskans. The PFD amount varies annually based on fund performance and legislative decisions — recent dividends have ranged from roughly $1,000 to over $3,000 per resident. The 2025 PFD was $1,702 per eligible resident.
To qualify for the PFD, veterans must meet standard Alaska residency requirements: establishing and maintaining Alaska as their primary residence with the intent to remain indefinitely. Military members establishing Alaska residency should contact the Alaska Division of Permanent Fund Dividend for guidance specific to their situation.
Hunting, Fishing, and Recreation
Alaska offers several recreation benefits for military members and veterans:
- Alaska National Guard members on active duty orders are eligible for resident hunting and fishing license rates
- Disabled veterans with service-connected disabilities may qualify for hunting and fishing license discounts or exemptions — contact the Alaska Department of Fish and Game for current eligibility details
- State parks — contact the Alaska Division of Parks and Outdoor Recreation for any available veteran discounts on camping and day-use fees
Transportation Benefits
Alaska Railroad — 20% Discount
Active duty service members, military retirees, and their dependents receive a 20% fare discount on Alaska Railroad travel. Valid military or veteran identification must be presented at boarding.
Alaska Marine Highway System — Half-Price Travel for Disabled Veterans
Veterans with a service-connected disability are eligible for a year-round reduced-fare pass on the Alaska Marine Highway System (AMHS), the state ferry network connecting coastal communities. The pass entitles the veteran and a required attendant (if certified by a physician) to travel at half price between Alaskan ports. The reduced fare does not include vehicle transport or private stateroom accommodations.
Want updates when benefit rates change?
Join thousands of service members who get our free weekly briefing.
Veterans Home and Cemetery
Alaska operates the Alaska Veterans & Pioneers Home in Palmer, providing long-term residential care for eligible veterans. The facility offers assisted living and nursing care levels of service.
Two national cemeteries serve Alaska veterans: Fort Richardson National Cemetery near Anchorage and Sitka National Cemetery in Sitka. Veterans who meet eligibility requirements for burial in a national cemetery may be interred at either facility.
Surviving Spouse Benefits
Alaska provides a state death gratuity of $750 to the surviving spouse or personal representative of a qualified Alaska veteran. To qualify, the veteran must have:
- Been an Alaska resident at the time of death
- Met honorable discharge requirements
- Met specific residency criteria: either residing in Alaska for at least one year prior to military service and returning within one year of retirement; or residing in Alaska for at least one year prior to death
- Burial occurring in Alaska on or after May 13, 1984, or death occurring on or after September 19, 1990
How to Access Alaska Veteran Benefits
The Alaska Office of Veterans Affairs (OVA) is the primary state agency supporting veterans and can assist with accessing benefits under federal, state, and local programs. Veterans Service Officers (VSOs) are available to provide free assistance with benefit applications at no cost to the veteran.
- Alaska Office of Veterans Affairs: veterans.alaska.gov
- Property tax exemptions: Apply through your local borough or city assessor’s office
- National Guard tuition assistance: Contact your unit’s education officer or the Alaska National Guard Education Office
- AMHS reduced fare pass: Contact the Alaska Department of Transportation and Public Facilities
- Land purchase discount: Contact the Alaska Department of Natural Resources, Division of Mining, Land, and Water
This article is provided by USMilitary.org, an independent educational resource. We are not affiliated with the Alaska Office of Veterans Affairs, the VA, or any government agency. Benefits are subject to change — verify current eligibility and program details at veterans.alaska.gov.
Frequently Asked Questions
No. Alaska has no state income tax at all, so military retirement pay, active duty pay, TSP distributions, and all other forms of military compensation are completely untaxed at the state level. No state income tax return is required.
Veterans with a service-connected disability rating of 50% or higher are exempt from property taxes on the first $150,000 of their primary home’s assessed value. The exemption transfers to a surviving spouse age 60 or older if the veteran passes away.
Yes — any Alaska resident who meets the state’s standard PFD residency requirements qualifies, including veterans. Military members establishing Alaska as their official state of legal residence should verify their PFD eligibility with the Alaska Division of Permanent Fund Dividend.
Yes. The Alaska State Tuition Assistance Reimbursement Program covers up to 100% of tuition and required fees for eligible Alaska National Guard members at state colleges, universities, and technical schools, up to 36 credit hours per fiscal year.