What Is the Nebraska Income Tax Rate?

Nebraska’s income tax system contributes to state revenue, supporting public services and programs. This guide provides an overview of the state’s income tax framework, including rates, obligations, and compliance requirements for individuals and businesses.

Individual Income Tax Rates and Brackets

Nebraska operates a progressive individual income tax system, where rates increase as taxable income rises. For the 2024 tax year, filed in 2025, Nebraska has four tax brackets, ranging from 2.46% to 5.84%.

Income thresholds for these brackets vary by filing status. For single individuals or those married filing separately, the 2.46% rate applies to income up to $2,999, and the 5.84% rate applies to taxable income exceeding $28,999.

For married filing jointly, the 2.46% rate covers income up to $5,999, with the 5.84% rate applying to income above $57,999. Head of household filers see the 2.46% rate for income up to $5,599, and the 5.84% rate applies to income over $42,999. These rates apply to your Nebraska taxable income, derived from your federal adjusted gross income (AGI) after state-specific adjustments.

Determining Your Nebraska Tax Obligation

Your Nebraska tax obligation depends on your residency status, deductions, and credits. An individual is considered a Nebraska resident if their domicile is in the state or if they maintain a permanent abode and are physically present for more than six months during the tax year. Residents are taxed on their entire federal adjusted gross income, even if some income was earned outside the state. Non-residents are taxed only on income sourced from Nebraska, while part-year residents are taxed on income earned while a resident and Nebraska-sourced income earned while a non-resident.

Nebraska offers deductions that can reduce your taxable income before tax rates are applied. For 2024, standard deduction amounts are $8,350 for single filers and married filing separately, $16,700 for married filing jointly and qualifying surviving spouses, and $12,250 for head of household filers. Taxpayers can choose to itemize deductions if their itemized deductions exceed the standard deduction.

Beyond deductions, tax credits directly reduce your tax liability after tax rates have been applied. For 2024, Nebraska offers several credits:

• The School Readiness Tax Credit, with nonrefundable and refundable components for eligible childcare providers and parents.
• A refundable Child Care Tax Credit for parents or legal guardians of children five years old or younger enrolled in licensed childcare, up to $2,000 per child, subject to household income limits.
• Nonrefundable credits for contributions to certified scholarship-granting organizations.
• A refundable credit for the installation of a reverse osmosis system, capped at $1,000.

Nebraska Business Income Tax Overview

Businesses operating in Nebraska are subject to corporate income tax, or for pass-through entities, their income is taxed at the owner level. For taxable years beginning in 2024, the corporate income tax rate is 5.58% on taxable income up to $100,000. For taxable income exceeding $100,000, the 2024 rate is 6.50%. This top corporate rate is part of a phased reduction, planned to decrease to 5.84% for tax years beginning after 2026.

Pass-through entities, such as S-corporations, partnerships, and LLCs taxed as partnerships, do not pay income tax at the entity level. Instead, their income and losses are “passed through” to owners and reported on individual income tax returns, taxed at applicable individual rates. Nebraska allows eligible pass-through entities to elect to pay state income tax at the entity level, known as the Pass-Through Entity Tax (PTET). This election can provide a federal tax deduction for state taxes paid. If a pass-through entity makes this election, the tax is calculated at the highest individual income tax rate.

Filing and Payment Requirements

The filing deadline for Nebraska individual income tax returns is April 15th, or the next business day if April 15th falls on a weekend or holiday. Corporate income tax returns are also due by April 15th. Pass-through entity returns, such as Form 1120-SN for S corporations and Form 1065N for partnerships, are due by the 15th day of the third month following the close of the tax year, which is March 15th for calendar year filers.

Taxpayers can file their Nebraska income tax returns electronically through approved software or by mail. Payment options include online payments via the Nebraska Department of Revenue’s e-pay system, direct debit from a bank account, or credit card payments, though credit card payments incur a convenience fee. Payments can also be made by mailing a check or money order with the appropriate payment voucher, such as Form 1040N-V for individual income tax.

Extensions are available for filing a Nebraska income tax return, but an extension to file does not extend the time to pay taxes owed. For individuals, a 6-month extension is automatically granted if a federal extension (IRS Form 4868) is filed. If a federal extension is not filed, individuals can request a state extension by filing Nebraska Form 4868N by the original due date. Corporations, fiduciaries, partnerships, and limited liability companies needing a state extension without a federal extension must file Nebraska Application for Extension of Time, Form 7004N. Estimated tax payments may be required if a taxpayer anticipates owing $400 or more for the year. These estimated payments are made in quarterly installments throughout the tax year.