Alaskans don’t owe taxes on the full amount of their PFD checks from last year.
A Feb. 10 advisory from the IRS announced that the $662 energy relief portion of the payout won’t be taxed. Alaskans need to pay taxes on the $2,622 dividend itself, which is subject to federal income tax as it is every year.
Allegra Hamer is the State Coordinator of the AARP Foundation’s free Tax-Aide Program, and she said this exception can add up to a substantial amount of savings for Alaska families.
“For a family of two adults and two children, for example, if you figure they’re at a 10% or 12% tax bracket, it’s $250 to $300 more in their pocket instead of in IRS’ pocket,” Hamer said.
If you have not filed your taxes yet and are using an online software, Hamer said to simply enter the $2,622 amount for the Alaska Permanent Fund Dividend when you reach the “other income” section. The energy relief portion doesn’t need to be included anywhere on your tax forms.
If you already filed and declared the full $3,284 amount, Hamer recommended filing an amendment to recoup the excess amount. She said her organization has been reaching out to clients who filed before the IRS announcement, to help them make the change, and hoped paid tax preparers are doing the same.
Hamer said you can submit an amendment through tax software packages as well, once it’s out of “draft form.” But if you bank on the IRS correcting the error, Hamer said not to expect to hear from them any time soon.
“I don’t know how IRS will handle that,” she said. “So they may not hear from IRS at all. Or if they do, it may be a year or a year and a half down the road.”
The deadline to file your 2022 individual tax return is April 18.
Michael Fanelli reported on economics and hosted the statewide morning news at Alaska Public Media.
