Inheritance Tax in Alaska: A Clear, Modern Overview
There is no inheritance tax in Alaska, but understanding federal tax laws is crucial for strategic estate planning to minimize liabilities.
Alaskans often ask how state rules affect inheritances. The short answer on inheritance tax in Alaska: there isn’t one. But there’s useful history—and a few important caveats—to know.
Alaska does not levy a state inheritance tax (a tax on heirs) or a state estate tax (a tax on an estate before distribution). The Alaska Court System states it plainly: “As of 2005, Alaska no longer collects a state estate tax.”
A Quick History
So why do some people remember a tax? Until the mid-2000s, Alaska, like many states, used a “pick-up” tax. This system let states collect a portion of the federal estate tax via a dollar-for-dollar federal credit, without increasing the overall tax paid by a family. Congress eliminated that credit in a federal law passed in 2001—the Economic Growth and Tax Relief Reconciliation Act (EGTRRA)—and phased it out by 2005. When the credit disappeared, Alaska’s linked tax effectively vanished too.
Alaska did not “decouple” from federal law to keep its own tax, while some other states did. The result: no state-level inheritance or estate tax in Alaska since 2005.
Federal estate tax still matters (for very large estates)
Even without a state tax, the federal estate tax can apply to very large estates. For 2025, the federal exemption is $13.99 million per person (effectively double for many married couples). Above the exemption, the federal rate schedule tops out at 40%.
Most estates fall below that threshold, but it’s smart to understand where you stand, especially if your asset values have grown significantly over time.
Inheritance Tax in Alaska vs. Taxes in Other States
Here’s another wrinkle. You might live in Alaska, but heirs or assets might be in states that do tax inheritances or estates. Six states impose inheritance taxes, and several levy estate taxes with lower exemptions than the federal one. If property sits in one of those states, their rules can apply to that property even if the rest of your plan is anchored in Alaska.
The Evolution at a Glance
- Before 2005: Alaska’s “pick-up” system mirrored the federal credit; families didn’t pay extra overall, but the state received a share via the credit.
- 2001–2005: EGTRRA phased out the federal state death tax credit, which made Alaska’s linked tax inoperative.
- Since 2005: No Alaska inheritance or estate tax; only federal rules (and other states’ rules, if relevant) remain.
Bottom Line on Inheritance Tax in Alaska
For residents, inheritance tax in Alaska isn’t a current concern. The tax faded out with federal changes in the early 2000s, and the state hasn’t brought it back. Keep an eye on federal thresholds, and consider the rules of any other states where you hold property. With a clear picture of your assets and where they live, you can keep transfers simple and your wishes on track.
(Learn More: Read about revocable trusts in Alaska versus Nevada.)