Live in Indiana, Work in Alaska: Which State Taxes Your Paycheck?
Answer
Indiana taxes the income and Alaska cannot. Residency, not the location of the job, drives this answer: Indiana reaches all of a resident's income, and Alaska has no personal income tax to apply to the part earned inside its borders.
Last verified
Crossing into a state with no income tax does not lower your tax bill, because your home state is not taxing you on where you work — it is taxing you on where you live. Indiana reaches all of a resident's income, and Alaska adds nothing on top.
What you file
- 1Resident return · Indiana
File a Indiana resident return reporting all of your income.
The two states, side by side
| Indiana | Alaska | |
|---|---|---|
| Taxes wages | Yes — flat | No |
| Reciprocity partners | 5 (Form WH-47) | None |
| Convenience rule | No | No |
| Nonresident return | Form IT-40PNR | Not applicable |
| Credit for other-state tax | Schedule 6 (Form IT-40PNR) | No income tax |
| Nonresident safe harbour | None published | Not applicable |
| Local income tax | Yes | No |
| Revenue department | Indiana Department of Revenue | Alaska Department of Revenue — Tax Division |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Alaska and working in Indiana gives:Work 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: Indiana → AlaskaHome state only
- 1099 contractor: Indiana → AlaskaHome state only — estimated payments
- Moved mid-year: Indiana → AlaskaOne part-year return — the state you left
Other Indiana pairs
Questions people actually ask
I live in Indiana and work in Alaska. Which state takes the tax out of my paycheck?
Indiana taxes the income and Alaska cannot. Residency, not the location of the job, drives this answer: Indiana reaches all of a resident's income, and Alaska has no personal income tax to apply to the part earned inside its borders.
Which state should my employer be withholding for?
Indiana. Your employer should withhold Indiana tax rather than Alaska tax on these wages. If a Alaska line is showing on your pay stub, raise it with payroll now rather than at filing time.
How current is this?
The Indiana and Alaska rules on this page were last checked against Indiana Department of Revenue and Alaska Department of Revenue — Tax Division 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.
- Indiana Department of Revenue — individual income taxaccessed 2026-08-07
- Alaska Department of Revenue — Tax Division — individual income taxaccessed 2026-08-07