Does Nebraska Have a State Income Tax?
Understand Nebraska's state income tax system, from its progressive structure to how your federal adjusted gross income is used to determine your final liability.
Nebraska imposes a state income tax on individuals, corporations, and fiduciaries. The state utilizes a progressive tax system, where the tax rate increases as an individual’s income rises. The rules for calculating and paying the tax are determined by state law and are subject to periodic changes.
Nebraska’s Individual Income Tax Rates
For the 2025 tax year, Nebraska’s individual income tax is structured across four brackets as part of a multi-year tax reduction plan. The rates for 2025 range from 2.46% to 5.2%. This system is marginal, meaning each rate only applies to the portion of income that falls within its specific bracket.
The income thresholds for these brackets vary based on filing status. The state plans to continue reducing rates and consolidating the number of tax brackets in coming years.
Calculating Nebraska Taxable Income
Determining your Nebraska taxable income begins with your federal Adjusted Gross Income (AGI). From the federal AGI, taxpayers can subtract the Nebraska standard deduction or their itemized deductions. For the 2025 tax year, the standard deduction is $7,900 for single filers, $15,800 for those married filing jointly, and $11,600 for heads of household.
After taking a deduction, taxpayers can also claim personal exemption credits for the taxpayer, their spouse, and any dependents. Nebraska law also allows for specific adjustments to income. An adjustment for the 2025 tax year is the full exemption of Social Security benefits from state taxation.
Filing and Payment Essentials
A Nebraska resident must file a state income tax return if they are required to file a federal return or if their Nebraska adjustments to federal AGI exceed $5,000. Nonresidents and partial-year residents must also file if they have income from Nebraska sources. The primary document is Form 1040N, which must be submitted by the April 15 deadline.
The Nebraska Department of Revenue encourages electronic filing, which is available through approved software vendors and can expedite processing and any potential refund. Taxpayers can also mail a paper copy of their Form 1040N.
If a balance is due, payment can be made electronically through the Department of Revenue’s website or by check with a mailed return. An extension to file is not an extension to pay; any tax owed is still due by the April 15 deadline to avoid penalties and interest.