ANCHORAGE, AK – For Alaskans aged 65 and over, state tax rules offer valuable relief, helping to ease the financial pressures that come with retirement. One of the key benefits is the extra standard deduction for seniors, which reduces taxable income and lowers the amount owed in federal taxes.
While Alaska is one of the few states without a broad-based personal income tax, residents are still required to pay federal income taxes. This is where the extra standard deduction becomes especially important for seniors. This article explains how the deduction works, who qualifies, and why it’s important for 2025.
Extra Standard Deduction
The extra standard deduction is an additional tax benefit provided to seniors who are 65 or older by the end of the tax year. This deduction is applied on top of the regular standard deduction, effectively lowering taxable income even further.
This benefit is particularly helpful for retirees who rely on fixed incomes such as Social Security, pensions, or retirement savings. By reducing the amount of income subject to federal taxes, seniors can keep more of their money for essential expenses.
Eligibility in Alaska for Benefit
To claim the extra deduction in Alaska, a taxpayer must meet the following requirements:
- Be 65 years of age or older by the end of the tax year.
- File as single, married filing jointly, or head of household.
- Provide proof of age if requested (e.g., driver’s license, passport, or birth certificate).
If both spouses in a joint return are 65 or older, each spouse can claim the deduction, effectively doubling the tax benefit.
How Much is the Deduction ?
For 2025, the federal standard deduction remains unchanged, with slight adjustments for inflation. Seniors aged 65 or older qualify for an extra standard deduction of:
- $1,550 if filing as single or head of household.
- $1,250 per spouse if married filing jointly.
This means:
- A single senior filer could reduce taxable income by an extra $1,550.
- A married couple, where both spouses are over 65, could reduce taxable income by an additional $2,500 on top of the regular standard deduction.
Double Benefit
Although Alaska does not have a state income tax, seniors still face federal income taxes. The extra standard deduction is one of the simplest and most effective ways to reduce that tax burden.
In addition, Alaska offers other retirement-friendly financial advantages, such as the Permanent Fund Dividend (PFD), which provides residents with an annual payment derived from state oil revenues. Combining the PFD with tax deductions can make a significant difference in seniors’ annual budgets.
Additional Tax Benefits for Seniors
Along with the federal extra standard deduction, seniors in Alaska may qualify for several other financial benefits, including:
- No state income tax on pensions, Social Security, or retirement accounts.
- Property tax exemptions in many boroughs and municipalities for seniors 65 and older, which can reduce or eliminate property tax bills.
- Reduced local fees for certain municipal services.
These benefits make Alaska one of the most tax-friendly states for retirees as per Kiplinger.
Conclusion
For older Alaskans, the extra standard deduction is a powerful tool for reducing federal tax liability in 2025. When combined with Alaska’s lack of state income tax and additional senior benefits, retirees can enjoy significant financial relief during their golden years.
Are you a senior in Alaska or know someone who could benefit from these tax breaks? Share your thoughts or experiences with the extra standard deduction in the comments below!
