Alaska 529 plan: no state income tax, what counts in 2026
Alaska has nothing to deduct a 529 from, so the questions here are about the accounts themselves and about what changes if the family later moves.
In the 529 at age 18
$86,942
$5,838 more than the same money in a taxable account, plus $0 of Alaska tax saved along the way.
| You put in | $51,000 |
| Growth, tax-free for school costs | $35,942 |
| Taxable account after tax | $81,104 |
| Alaska tax saved, 17 years | $0 |
Taxable account: dividends taxed every year and the remaining gain taxed at sale, at the 2026 federal capital gains rate for this income, NIIT where it applies, and your state marginal rate.
| Year | Child’s age | Put in | 529 balance |
|---|---|---|---|
| 3 | 4 | $9,000 | $9,811 |
| 6 | 7 | $18,000 | $21,495 |
| 9 | 10 | $27,000 | $35,412 |
| 12 | 13 | $36,000 | $51,987 |
| 15 | 16 | $45,000 | $71,728 |
| 17 | 18 | $51,000 | $86,942 |
Worked out by Radif Partners · How we calculate · Alaska rule read on October 19, 2026, brackets of tax year 2026 · not tax advice
Alaska has had no individual income tax since the legislature repealed it in 1980, so a 529 contribution brings no state deduction or credit, and no Alaska tax applies to withdrawals of any kind. What the state does offer is a choice of three plans run by the Education Trust of Alaska: Alaska 529, the T. Rowe Price College Savings Plan and John Hancock Freedom 529. The plan disclosure sets one balance ceiling of $550,000 per beneficiary, counted across all Trust plans together. Federal rules decide everything else: K-12 costs up to $20,000 a year from 2026, credential programs, and permanent rollovers to an ABLE account, all described in the plan supplement of June 30, 2026. The value of the account is growth without tax: $250 a month from age one, at a 6 % assumed return, reaches about $86,942 at eighteen. If the family moves to a state with an income tax, that state's rules start to apply from the move.
| State income tax on wages | None |
|---|---|
| Benefit for contributions | None (no income tax) |
| State plans (official names, no recommendation) | Alaska 529, T. Rowe Price College Savings Plan, John Hancock Freedom 529 |
| Account balance limit | $550,000 |
One trust, three doors
Many states run a single direct plan. Alaska's Education Trust offers three: Alaska 529, the T. Rowe Price College Savings Plan and John Hancock Freedom 529. They differ in who sells them and in their investment menus, not in tax treatment, since Alaska has no tax to treat them by. Because the state gives no deduction, there is also no parity question to ask. A plan from another state carries the same Alaska result as a Trust plan: zero tax going in, zero coming out.
The plan disclosure document adds the three plans together for the balance limit. Once the accounts of one beneficiary reach $550,000 across the Trust, new contributions stop, even if each account on its own is smaller.
What growth does without a state deduction
With no deduction to collect, the 529 earns its keep on the federal side. Earnings are never taxed when spent on qualified costs, while a regular brokerage account pays tax on dividends each year and on the gain at sale. The calculator above runs that comparison for a family that starts at the child's first birthday with $250 a month: $86,942 at eighteen, $5,838 more than the taxable account. The figure has no Alaska line because there is no Alaska tax in either case.
Starting later changes the scale. A nine-year-old with $10,000 already saved and $600 a month added reaches about $101,884 by eighteen at the same assumed 6 %. Try your own numbers here.
Alaska account started at nine
In the 529 at age 18
$101,884
| You put in | $74,800 |
| Growth, tax-free for school costs | $27,084 |
| Taxable account after tax | $97,635 |
| Alaska tax saved, 9 years | $0 |
Federal rules are the only rules
The June 30, 2026 supplement describes the 2025 federal law: credential programs and the wider K-12 expense list for distributions after July 4, 2025, the $20,000 K-12 limit from 2026, and the permanent rollover to an ABLE account. The Alaska 529 site states the K-12 limit as well. Rollovers to a Roth IRA follow the federal test: an account open 15 years and $35,000 per beneficiary over a lifetime, explained on the Roth rollover page.
If the family moves south
An Alaska account keeps working after a move, but the new home state now writes the tax rules. Some states reward contributions to any state's plan. Arizona is one: a couple there at $96,000 who keeps adding $4,000 a year to an Alaska Trust plan would save $100 on the Arizona return. Others count only their own plan; the same couple in Alabama would get $0 unless they opened a CollegeCounts account. Because no deduction was ever taken in Alaska, there is nothing for the new state to recapture on the old money, though its own rules on K-12 and other withdrawals then apply to the account.