by Anchorage, AK – For Alaskans over the age of 65, state tax rules provide meaningful relief that helps ease financial pressures in retirement. One key benefit is the extra standard deduction for seniors, which lowers taxable income and reduces the amount owed on state taxes.
While Alaska is already known for being one of the few states without a broad-based personal income tax, residents still pay federal income taxes — and that’s where the extra deduction becomes especially important for seniors. This article explains how the deduction works, who qualifies, and why it matters in 2025.
What Is the Extra Standard Deduction?
The extra standard deduction is an additional tax deduction offered to seniors who are 65 or older by the end of the tax year. It comes on top of the standard deduction already available, effectively lowering taxable income even further.
This deduction is particularly valuable for retirees who may live on fixed incomes from Social Security, pensions, or retirement savings. By reducing the amount of income subject to federal tax, seniors keep more of their money for essential expenses.
Eligibility in Alaska
To claim the deduction, a taxpayer must meet these requirements:
- Be 65 years of age or older at the end of the tax year.
- File as single, married filing jointly, or head of household.
- Provide proof of age if requested (such as a driver’s license, passport, or birth certificate).
If both spouses in a joint return are 65 or older, each spouse can claim the deduction, doubling the tax benefit.
How Much Is the Deduction Worth?
For tax year 2025, the federal standard deduction remains the same as in prior years, with adjustments for inflation. Seniors 65 or older qualify for an extra standard deduction of $1,550 if single or head of household and $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.
For updates and official guidance, seniors can review the IRS guidelines on standard deductions.
Why It Matters in Alaska
Even though Alaska does not have a state income tax, seniors still pay federal income taxes. The extra standard deduction is one of the simplest ways to lower that burden.
In addition, Alaska offers other retirement-friendly financial advantages, including the Permanent Fund Dividend (PFD), which provides residents with an annual payment from state oil revenues. For seniors, combining the PFD with tax deductions can make a significant difference in annual budgets.
Read Also: Understanding the Maryland Extra Standard Deduction for Seniors Over 65
Additional Tax Benefits for Seniors
Alongside the federal deduction, Alaskan seniors may also qualify for:
- No state income tax on pensions, Social Security, or retirement accounts.
- Property tax exemptions in many boroughs and municipalities for seniors 65 and older, often reducing or eliminating property tax bills.
- Reduced local fees for certain municipal services.
Together, these benefits make Alaska one of the most tax-friendly states for retirees.
Key Takeaways for Seniors
- Seniors 65 and older qualify for the extra federal standard deduction.
- The deduction is $1,550 for single filers or $1,250 per spouse for married couples filing jointly in 2025.
- Alaska residents benefit even more since there’s no state income tax.
- Seniors can combine this deduction with other benefits like the Permanent Fund Dividend and local property tax exemptions.
Final Thoughts
For older Alaskans, the extra standard deduction is a powerful tool for lowering federal tax liability in 2025. Combined with Alaska’s lack of state income tax and additional senior benefits, retirees can enjoy significant financial relief during their golden years.
Do you think Alaska’s senior tax benefits make it one of the best states to retire in? Share your thoughts in the comments at ibwhsmag.com.
