Does AlaskaTax Tips & Overtime After the OBBBA?
Alaska has no state income taxfor the federal OBBBA tip and overtime deductions. Here's what that means for your paycheck.
Quick answer
Alaska has no state income tax on wages, so you owe no state income tax on tips or overtime regardless of OBBBA conformity. You still claim the federal OBBBA deduction (and still owe federal FICA).
Tips deduction
No state income tax
Overtime deduction
No state income tax
How OBBBA tips & overtime work in Alaska
The OBBBA is a federal deduction: eligible workers can deduct up to $25,000 of tips and $12,500 of overtime premium ($25,000 if married filing jointly) from federal taxable income through 2028. Whether Alaska follows suit depends on state conformity, but because there is no state income tax here it does not change your state bill. FICA (Social Security and Medicare) applies everywhere. Learn more about the tip deduction and the overtime deduction.