Congressman Begich introduces bill to remove income tax from Permanent Fund dividend

By SUZANNE DOWNING

March 10, 2026 – Congressman Nick Begich has introduced legislation that would exempt payments such as Alaska’s Permanent Fund Dividend from federal income taxes, a move aimed at providing direct tax relief to Alaska residents.

The congressman announced the bill during Tuesday’s speech at the Alaska Legislature.

Begich introduced HR 7760 on March 3. The measure would amend the Internal Revenue Code of 1986 to exclude certain payments from gross income when they come from state-established funds created for the welfare of residents. If enacted, the bill would mean payments such as Alaska’s annual dividend would no longer be counted as taxable federal income.

Currently, the dividend distributed through the Alaska Permanent Fund is treated as taxable income by the federal government. Each year, Alaskans receive a Form 1099-MISC reporting the payment, which must be included on Schedule 1 of Form 1040 when filing federal tax returns. Although Alaska has no state income tax, residents must still pay federal taxes on the dividend.

The legislation has been referred to the US House Committee on Ways and Means, which has jurisdiction over federal tax policy. As of today, the bill had no co-sponsors and had not advanced beyond the committee stage.

Although Begich’s office has not issued a detailed press release specifically highlighting the bill, the proposal fits within his broader emphasis on tax relief and economic policies intended to benefit Alaska residents.

The Permanent Fund dividend distributes a portion of the state’s oil wealth to eligible Alaskans each year. The program, created in the early 1980s, is funded through earnings from the Alaska Permanent Fund, which invests a share of the state’s oil revenues.

For HR 7760 to become law, it needs to advance through the House Ways and Means Committee, pass both the US House and Senate, and be signed by the president. For now, the bill remains in committee awaiting further action.