If you serve in the military or have served, Alaska can be a friendly state for your wallet. It has no state income tax, and it requires every city and borough to exempt a large slice of a disabled veteran's home value from property tax. Alaska draws many military families after a PCS, which is short for Permanent Change of Station, the official military move from one duty station to another, with Joint Base Elmendorf-Richardson anchoring Anchorage, Eielson Air Force Base and Fort Wainwright near Fairbanks, and Fort Greely to the south. This guide explains the main rules in plain language and points you to the state's own sources. Tax law changes, so treat these figures as a starting point and confirm the current rules before you file.
How Alaska Helps Disabled Veterans With Property Taxes
Alaska does not waive a disabled veteran's whole property tax bill, but it removes a large amount of the home's value from the tax. The U.S. Department of Veterans Affairs, known as the VA, is the federal agency that rates service-connected disabilities, and your rating decides whether you qualify.
As the Alaska Office of Veterans Affairs explains, and as state law in Alaska Statute 29.45.030 requires, a disabled veteran with a service-connected disability rating of 50 percent or more is entitled to an exemption on the first $150,000 of the assessed value of a primary residence. Assessed value is the dollar figure the local assessor places on your home. Because the break covers the first $150,000 of value rather than the whole bill, a more valuable home still owes tax on the value above $150,000, so it lowers the bill rather than erasing it for higher-value homes.
Who Qualifies
To claim the exemption, the Alaska Division of Community and Regional Affairs and local boroughs list a few core rules. You must be an Alaska resident, you must own and occupy the home as your primary residence and permanent place of abode, and you must have a service-connected disability rated at 50 percent or more by the VA or your branch of service. The same $150,000 exemption also applies to senior citizens age 65 and older.
Surviving Spouses
The benefit can carry to a surviving spouse. The Fairbanks North Star Borough, which includes North Pole and serves the Eielson and Fort Wainwright communities, explains in its disabled veteran exemption facts that an unremarried widow or widower of a qualifying disabled veteran may receive the exemption if he or she is at least 60 years old. Because the conditions depend on your situation, confirm them with your borough or city assessor.
How It Works With Your Local Tax Bill
Property tax in Alaska is local. The state requires the exemption, but cities and boroughs administer it, set the application deadlines, and send the bills. That local control matters in two ways. First, some parts of Alaska have no property tax at all, so the exemption only matters where a city or borough levies one. Second, deadlines differ from place to place. The Fairbanks North Star Borough, for example, generally accepts applications through February 14, while other boroughs set different dates, so check yours early.
If you are weighing where to settle, our guide to the military bases in Alaska can help you picture the local cost of owning a home near Anchorage, Fairbanks, or Fort Greely.
Military Pay and Alaska's No Income Tax
Here is the part that makes Alaska stand out: it has no state personal income tax. For service members and veterans, that is a real advantage.
Because Alaska does not tax personal income, it does not tax your active-duty military pay, your military retirement pay, or your VA disability compensation at the state level. The same is true for Survivor Benefit Plan payments and similar military survivor benefits. You will still owe federal taxes, but you can leave the state income tax line off your Alaska budget. That makes claiming Alaska as your home state simple and favorable while you are stationed here.
A Note for Military Spouses: MSRRA
If you are a military spouse, the Military Spouse Residency Relief Act, known as MSRRA, may still matter to you. MSRRA is a federal law that lets a military spouse keep a home state for tax and voting purposes even after moving on military orders. You do not automatically become an Alaska resident just because your service member got orders here.
Since Alaska has no state income tax, claiming Alaska as your residence can be simple and favorable while you are stationed here. Residency rules can get detailed, especially if you still earn income tied to another state, so confirm how MSRRA applies to your family before you make a change. For the property tax exemption in this guide, what usually matters most is that you are an Alaska resident who owns and lives in the home as a primary residence.
