Nebraska income tax rates for 2025 and 2026, and the cut to 3.99%

Nebraska has four brackets for 2025, at 2.46%, 3.51%, 5.01% and 5.2% (Neb. Rev. Stat. 77-2715.03). The brackets are indexed for inflation each year. These are the final 2025 amounts from the Department of Revenue’s tax calculation schedule, used for returns filed in 2026.

LB 754 of 2023 lowers both the third and the top rate. For 2026 they are each 4.55%, so Nebraska effectively has three rates: 2.46%, 3.51% and 4.55%. From 2027 both are 3.99%. The 2024, 2025 and 2026 sessions did not change these rates.

The final 2026 tables are not out yet. The Department of Revenue’s 2026 estimated-tax booklet puts the 4.55% rate on taxable income over $24,760 for single filers, $49,530 for joint filers and $39,620 for heads of household, and says that schedule is only for estimated payments.

Form 1040N starts from federal adjusted gross income, adds and subtracts Nebraska adjustments on Schedule I, then takes off the Nebraska standard deduction or your federal itemized deductions minus state and local income taxes. If you took the federal standard deduction you must take Nebraska’s. Instead of a personal exemption deduction, Nebraska gives a credit for each exemption: $171 for 2025 and, per the 2026 estimated-tax booklet, $176 for 2026.

For example, a single filer with $60,000 of wages has $51,400 of Nebraska taxable income for 2025 after the $8,600 standard deduction. The tax is about $2,195 before credits, or about $2,024 after the $171 exemption credit. Using the 2026 estimated-tax figures, the same filer would owe about $1,850 after credits.

Nebraska follows the federal tax code as it changes, but its return starts from federal AGI. The Department of Revenue says the July 2025 federal deductions for tips, overtime and car loan interest are taken after AGI and so have no automatic effect on Nebraska tax. The $6,000 federal deduction for people 65 or older is figured the same way, below AGI, so as we read the rules it does not reduce Nebraska tax either. A 2026 bill (LB 932) to create a Nebraska tips and overtime deduction did not become law. The larger federal cap on state and local tax deductions does help Nebraska itemizers.

No for Social Security: since 2024 the full amount included in federal AGI is subtracted on Schedule I, with no income limit. Military retirement pay has been 100% exempt since 2022, including Coast Guard, Public Health Service and NOAA retirees, and Railroad Retirement benefits are subtracted too.

Federal civil service annuities under the old CSRS system can be excluded, but a 2024 law (LB 1317) took FERS annuities out of the exclusion. Other pensions, IRA and 401(k) distributions do not have a general Nebraska exclusion and are taxed.

The income tax credit for school district property taxes ended after 2023; that relief now appears directly on property tax statements.

A resident files if they must file a federal return showing a federal tax liability before credits, or if they have $5,000 or more of net Nebraska adjustments. Part-year residents and nonresidents file if they have Nebraska-source income. Everyone files Form 1040N with a copy of the federal return; amended returns also use Form 1040N and can be e-filed from tax year 2025. NebFile offers free e-filing.

Returns are due April 15, so 2026 returns are due April 15, 2027. Nebraska accepts the federal extension; you only need Form 4868N to make a payment or if you did not get a federal extension. Interest still runs from April 15.

Check a Nebraska refund with “Where’s My Refund?” from the Department of Revenue’s refund information page. It asks for your Social Security number, filing status, the tax year and your expected refund to the nearest dollar, and only covers this year’s original return, not amended or prior-year returns. The refund line is 800-742-7474 (Nebraska and Iowa) or 402-471-5729.

The Department says to allow at least 30 days for an error-free e-filed return and at least three months for a paper return, and that refunds are generally issued by July 15 for returns filed by April 15. Paper returns do not earn refund interest.

You are a Nebraska resident if Nebraska is your domicile, or if you keep a permanent home in Nebraska and are there at least 183 days of the year, counting any part of a day. Part-year residents and nonresidents report total federal AGI, figure the tax as if resident, and then pay the share that matches their Nebraska income on Schedule III.

Since 2025, a nonresident who works in Nebraska more than seven days can owe Nebraska tax on pay for days worked elsewhere for their own convenience, with a safe harbor for short conference or training trips. We found no reciprocal agreement in Nebraska’s guidance: residents report all income and claim the Schedule II credit, including Iowa commuters.