Live in Alaska, Work Remotely for a Vermont Employer: Who Taxes You?
Answer
Vermont cannot follow the paycheck home. Because Vermont sources wages to the place of performance and you perform them in Alaska, the income is Alaska-source; and Alaska does not tax wages. The result is no state income tax on these earnings at all.
Last verified
Wages are sourced to the place where the work is physically performed. That default is what makes remote work simple, and it is only disturbed when the employer's state runs a convenience-of-the-employer rule. Vermont does not.
What you file
There is nothing to file in either Alaska or Vermont on these wages. Your federal return is unaffected — the federal government taxes the income whatever the states do.
The two states, side by side
| Alaska | Vermont | |
|---|---|---|
| Taxes wages | No | Yes — graduated |
| Reciprocity partners | None | None |
| Convenience rule | No | No |
| Nonresident return | Not applicable | Form IN-111 with Schedule IN-113 |
| Credit for other-state tax | No income tax | Schedule IN-117 |
| Nonresident safe harbour | Not applicable | None published |
| Local income tax | No | No |
| Revenue department | Alaska Department of Revenue — Tax Division | Vermont Department of Taxes |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Vermont and working in Alaska gives:Home state only.
Same two states, different situation
The withholding answer turns on how you are paid and where the work happens, not only on which two states are involved.
- W-2 commuter: Alaska → VermontWork state only
- 1099 contractor: Alaska → VermontClient state only, if you work there
- Moved mid-year: Alaska → VermontOne part-year return — the state you moved to
Other Alaska pairs
Questions people actually ask
I live in Alaska and work remotely for a Vermont employer. Which state do I pay?
Vermont cannot follow the paycheck home. Because Vermont sources wages to the place of performance and you perform them in Alaska, the income is Alaska-source; and Alaska does not tax wages. The result is no state income tax on these earnings at all.
Which state should my employer be withholding for?
Neither. There is no state income tax to withhold on either side of this pairing, so a state line on your pay stub for Alaska or Vermont is an error worth querying.
Does my Vermont employer's location alone create a Vermont tax obligation?
No. Vermont sources wages to the place where the work is physically performed, and it does not apply a convenience-of-the-employer rule that would override that. Days you actually spend working inside Vermont are a different matter — those are Vermont-source income and can require a nonresident return.
How current is this?
The Alaska and Vermont rules on this page were last checked against Alaska Department of Revenue — Tax Division and Vermont Department of Taxes on 2026-08-07. We re-check the full grid every December after state legislative sessions close, and re-check the convenience-of-the-employer states quarterly because that is where the rules move fastest.
Sources
Every fact above comes from the revenue department that publishes the rule. We do not cite secondary summaries, and we do not restate a figure we could not find at source.
- Alaska Department of Revenue — Tax Division — individual income taxaccessed 2026-08-07
- Vermont Department of Taxes — individual income taxaccessed 2026-08-07