Live in Alaska, Work in Vermont: Which State Taxes Your Paycheck?
Answer
One return, filed in Vermont. Your employer withholds Vermont tax on the wages you earn there and you settle up on a Vermont nonresident return. Alaska does not tax wages, so this pair produces a single state filing rather than two.
Last verified
This is the mirror image of the more common commute. There is no home-state return to file, so the Vermont nonresident return carries the whole obligation — and because Alaska charges nothing, there is no credit mechanism involved anywhere.
What you file
- 1Nonresident return · VermontForm IN-111 with Schedule IN-113
File a Vermont nonresident return for the wages you earned in Vermont. Alaska has no wage income tax, so there is no second return and no credit to claim.
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.
- Remote worker: Alaska → VermontNo state income tax on your wages
- 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 in Vermont. Which state takes the tax out of my paycheck?
One return, filed in Vermont. Your employer withholds Vermont tax on the wages you earn there and you settle up on a Vermont nonresident return. Alaska does not tax wages, so this pair produces a single state filing rather than two.
Which state should my employer be withholding for?
Vermont. The wages are sourced to Vermont, so Vermont withholding is correct and there is no Alaska withholding to set up, because Alaska levies no income tax on wages.
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