Alaska: Prejudgment Interest Rules

The short answer

Alaska covers prejudgment interest with a single, unified statute rather than splitting contract and tort claims into separate rules. AS 09.30.070 sets a floating rate -- 3 percentage points above the 12th Federal Reserve District discount rate as of January 2 of the year a judgment is entered, which works out to 6.75% for a judgment entered in 2026 -- and that rate is locked in for the entire life of that judgment, not reset each year as interest accrues. Interest starts running from whichever comes first: the day the defendant was formally served with the lawsuit, or an earlier day the defendant received written notice that an injury had occurred and a claim might follow. It never applies to future economic damages, future noneconomic damages, or punitive damages, and Alaska's courts have confirmed it never compounds -- simple interest only, for the whole prejudgment period.

Requirements one by one

Governing law

A single statute, AS 09.30.070 ("Interest on judgments; prejudgment interest"), does virtually all the work -- it applies to a contract claim and a tort claim alike, without the separate mandatory-versus-discretionary tracks several other states use. A companion section, AS 09.50.280, cross-references this same statute for a judgment entered against the State of Alaska itself, while adding its own rule barring punitive damages against the State.

Interest rate

The rate floats year to year but locks in permanently once a judgment is entered: 3 percentage points above the 12th Federal Reserve District's discount rate as published on January 2 of the year the judgment or decree is entered. For 2026, the Alaska Court System's own published rate table sets this at 6.75%. That rate then applies to the judgment for as long as it remains unpaid -- it doesn't get recalculated in later years even if the published discount rate changes. If the parties have a written contract that specifies its own interest rate (up to the legal ceiling for that kind of contract), the contract rate controls instead and gets written directly into the judgment.

When interest starts running

Interest starts on whichever date comes first: the day the defendant was served with the summons and complaint, or an earlier day the defendant received written notification that an injury had occurred and that a claim might be brought over it. That written-notification trigger only counts if it's the kind of notice that would lead "a prudent person" to expect a claim for personal injury, death, or property damage -- a vague demand letter that doesn't clearly flag potential litigation may not qualify. The parties can also agree to a different accrual date, which a court will honor instead of the statutory default.

Contract vs. tort claims

Alaska treats the two claim types the same way, joining a handful of other states in this survey (Hawaii, Rhode Island, and others) that don't split prejudgment interest into a separate contract track and tort track. The same floating rate, and the same basic non-discretionary mechanism, apply whether the underlying claim is a breach of contract or a personal-injury tort. In practice the two claim types often end up using different accrual triggers -- a contract claim's interest more commonly runs from a demand or due date captured by the "written notification" language, while a tort claim's interest more often runs from the date the lawsuit was served -- but that's a difference in which trigger applies factually, not a difference written into the statute by claim type.

Mandatory or discretionary

Once the accrual date and the underlying money judgment are established, awarding interest isn't left to the court's discretion -- the statute doesn't give a judge the option to simply decline it. The one place discretion genuinely enters is the accrual-date question itself: the statute's default triggers (service of process or written injury notice) apply "except when the court finds that the parties have agreed otherwise," so the parties' own agreement about when the clock starts can override the statutory default.

Simple or compound

Simple interest only. The Alaska Supreme Court has held directly that AS 09.30.070 "does not provide for compound interest on judgments," rejecting a request to compound prejudgment interest annually in an inverse-condemnation case and affirming a simple-interest calculation instead, running from the date of the underlying taking through the date of judgment.

Claims against the government

A judgment against the State of Alaska draws exactly the same prejudgment interest as a judgment against a private party, computed under AS 09.30.070 -- there's no separate rate or reduced mechanism for the State. But AS 09.50.280 adds one absolute limit: a judgment against the State can never include punitive damages, a rule the Alaska Supreme Court has enforced directly, reversing a punitive-damages award that had been entered against a state corporation. Municipalities work differently -- there's no blanket immunity comparable to many other states' tort claims acts. AS 09.65.070 lets a lawsuit be maintained against a municipality in its corporate capacity, subject to specific, narrower carve-outs (certain fire department employees performing department functions, some property-inspection failures, and a handful of other listed exceptions). This survey found no separate prejudgment-interest rule or damages cap written specifically for municipalities, so ordinary AS 09.30.070 rules appear to apply to a municipal judgment just as they would to a private one.

Other exceptions

The statute's own text draws three flat lines: prejudgment interest "may not be awarded for future economic damages, future noneconomic damages, or punitive damages," regardless of whether the underlying claim is contract or tort. Beyond that, the accrual-date default itself is an exception of sorts -- it only governs "except when the court finds that the parties have agreed otherwise," so a contract or settlement provision addressing the interest start date can displace the statutory default entirely.

What trips people up

The biggest trap is treating Alaska's rate as a fixed number. It floats -- it's tied to the Federal Reserve discount rate published on January 2 of the year judgment is entered, and it's easy to plug in an outdated figure from an old case or a stale online chart instead of checking the rate for the actual year in question. A judgment entered in 2019 and a judgment entered in 2026 can carry meaningfully different locked-in rates.

The second trap is the "written notification" accrual trigger for a tort claim. A vague letter mentioning an incident may not be the kind of notice that "would lead a prudent person to believe that a claim will be made" -- if it doesn't clearly signal that litigation might follow, a court may find that service of process, not the earlier letter, is what actually started the interest clock.

Common questions

What's Alaska's prejudgment interest rate?
It floats: 3 percentage points above the 12th Federal Reserve District discount rate as of January 2 of the year the judgment is entered -- 6.75% for a 2026 judgment -- unless a written contract sets its own rate.

Does Alaska treat a personal injury claim differently from a breach of contract claim for prejudgment interest purposes?
Not by rate or mechanism -- one statute, AS 09.30.070, covers both. The practical difference is mainly which accrual trigger applies: contract claims often key off a written notice or demand, tort claims often key off service of the lawsuit.

Does prejudgment interest compound in Alaska?
No. The Alaska Supreme Court has held that AS 09.30.070 provides for simple interest only, never compounding.

Can I get prejudgment interest if I sue the State of Alaska?
Yes, at the same rate as any other judgment under AS 09.30.070 -- but you can never recover punitive damages against the State, which AS 09.50.280 bars outright.

Statutes and sources

• AS 09.30.070(a) -- "the rate of interest on judgments and decrees for the payment of money, including prejudgment interest, is three percentage points above the 12th Federal Reserve District discount rate in effect on January 2 of the year in which the judgment or decree is entered, except that a judgment or decree founded on a contract in writing... bears interest at the rate specified in the contract if the interest rate is set out in the judgment or decree." Accessed 2026-07-05: https://law.justia.com/codes/alaska/title-9/chapter-30/article-1/section-09-30-070/
• AS 09.30.070(b) -- "prejudgment interest accrues from the day process is served on the defendant or the day the defendant received written notification that an injury has occurred and that a claim may be brought against the defendant for that injury, whichever is earlier." Accessed 2026-07-05: https://law.justia.com/codes/alaska/title-9/chapter-30/article-1/section-09-30-070/
• AS 09.30.070(c) -- "Prejudgment interest may not be awarded for future economic damages, future noneconomic damages, or punitive damages." Accessed 2026-07-05: https://law.justia.com/codes/alaska/title-9/chapter-30/article-1/section-09-30-070/
• AS 09.50.280 -- "If judgment is rendered for the plaintiff, it shall be for the legal amount found due from the state with interest as provided under AS 09.30.070 and without punitive damages." Accessed 2026-07-05: https://www.akleg.gov/statutesPDF/Title-9.pdf
• AS 09.65.070(a) -- "Except as provided in this section, an action may be maintained against a municipality in its corporate character and within the scope of its authority." Accessed 2026-07-05: https://www.akleg.gov/statutesPDF/Title-9.pdf