Updated October 5, 2026. Quick answer: No. Alaska does not tax trust income under a personal income tax, because the Tax Division annual report says the Legislature in 1980 “repealed the parts of AS 43.20 that impose the individual income tax” and the documents read describe no replacement tax on trusts.
How Alaska treats trust income
| Item | What the documents say |
|---|---|
| Treatment | Alaska has no individual income tax in force, and a legislative staff history of the tax states that the “Personal income tax repealed in 1980 after the oil boom”. The history was prepared by the office of a state representative. |
| Where the repeal is recorded | The 2024 Tax Division annual report history says that in 1980 the Legislature “repealed the parts of AS 43.20 that impose the individual income tax”. The same entry says the Legislature retained the exemption for S-Corporations. |
| Rate on trust income | No Alaska income tax rate applies to trust income, and the documents read print no trust rate schedule. |
| Distribution deduction | With no individual income tax in force, the documents read describe no state distribution deduction for trusts. |
| Nonresident trusts | The documents read set no Alaska income tax on trusts, resident or nonresident, and describe no source income rule for them. |
| What Alaska taxes instead | The Tax Division report says the state taxes corporations on net income and states that “Alaska levies a corporate income tax on Alaska taxable income”. The report does not say that this tax reaches trusts. |
| Return to file | The documents read describe no Alaska fiduciary income tax return for trusts. |
A $10,000 example
A trust with $10,000 of taxable income owes $0 of Alaska income tax on it. Federal tax on the trust’s income still applies.
A trust with ties to another state also has to check that state’s own rules, because each state sets its own test for taxing a trust.
What changes in 2026
The latest documents read print no 2026 change to how trust income is taxed.
Federal rules
The state’s treatment sits on top of the federal one. The federal brackets a trust faces are laid out in trust tax brackets versus individual brackets, and capital gains that a trust keeps are covered in capital gains stay in the trust. The IRS explains the federal return in the About Form 1041 page.
Related: how Alaska taxes retirement income, whether Alaska taxes pensions, what a living trust costs in Alaska, and federal trust tax brackets.
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Answer againSources
- Annual Report 2024, Tax Division (Alaska Department of Revenue): https://www.akleg.gov/basis/get_documents.asp?docid=2388
- History of Alaska Individual Income Tax (Alaska State Legislature, 30th Legislature): www.akleg.gov
Sources: the primary documents linked above, read on October 5, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.