Found a solution: When doing the "federal review" (at the end of the process) it will flag as issue each W-2 that has Local taxes and no associated state (skip those!). Then go to the bottom where it will allow you to manually enter info on Associated State for all W-2s (and you can input "AK" or which ever state you need). This resolves the issue and is confirmed to work by TurboTax help specialist.