There are plenty of good posts out there showing you how to trigger Lambda via SQS. But I couldn’t find one that specifically shows how to trigger an alias. I ended up contacting AWS Support and came to the following solution:

If you’re using terraform, make sure to use the alias ARN when defining your aws_lambda_event_source_mapping.

resource "aws_lambda_alias" "test_alias" {
  name             = "testalias"
  function_name    = "${aws_lambda_function.lambda_function_test.arn}"

resource "aws_lambda_event_source_mapping" "example" {
  event_source_arn = "${aws_sqs_queue.sqs_queue_test.arn}"
  function_name    = "${aws_lambda_alias.test_alias.arn}"

If you’re using the AWS Console, the trick is to setup the trigger via the Lambda Alias page, not via the SQS dashboard.

Add Trigger via Lambda Alias Console Page

Add SQS Trigger