Question 1

What is Nebraska's state income tax rate for 2025?

Accepted Answer

Nebraska imposes a 4-bracket progressive income tax under Neb. Rev. Stat. §77-2715.03 with TY2025 single-filer rates of 2.46% (up to $4,030), 3.51% ($4,031–$24,120), 5.01% ($24,121–$38,870), and 5.20% (above $38,870). The top rate was reduced from 5.84% (TY2024) to 5.20% (TY2025) under LB 754 (2023), which sets a phasedown schedule to 4.55% (TY2026) and 3.99% (TY2027) subject to revenue triggers.

Question 2

What is Nebraska's standard deduction for 2025?

Accepted Answer

Nebraska's TY2025 standard deduction under Neb. Rev. Stat. §77-2716.01 is $8,150 for single and MFS filers, $11,950 for HOH, and $16,300 for MFJ filers, cost-of-living indexed annually. Nebraska also allows a personal exemption credit of $166 per filer and per dependent under §77-2716 (nonrefundable but not phased out).

Question 3

Does Nebraska tax Social Security and military retirement income?

Accepted Answer

Nebraska fully exempts Social Security benefits from state income tax effective TY2024 under LB 873 (2022), which accelerated the phaseout of Social Security taxation from the prior schedule (originally scheduled to complete by TY2030). Nebraska also fully exempts military retirement benefits under Neb. Rev. Stat. §77-2716(15), enacted by LB 387 (2022) — a change from the prior 50% exclusion.

Question 4

Do Nebraska cities or counties charge a local income tax?

Accepted Answer

No. Nebraska does not authorize its municipalities or counties to levy a local income tax. All personal income tax in Nebraska is collected at the state level under Neb. Rev. Stat. Chapter 77, Article 27. Municipal revenue is derived primarily from local property tax and local sales tax add-ons authorized under §77-27,142.

Question 5

What is Nebraska's income tax rate schedule after 2025?

Accepted Answer

Under the LB 754 (2023) 'Reduce Income Tax Rates' phasedown, Nebraska's top marginal rate is scheduled to decline from 5.20% (TY2025) to 4.55% (TY2026) and 3.99% (TY2027), with each step contingent on the state general-fund revenue growth trigger under §77-2715.03(4). LB 754 also compressed the bottom brackets, ultimately targeting a 3.99% flat rate structure similar to the neighboring Iowa and Missouri reform trajectories.

Nebraska Income Tax Calculator

Nebraska Tax Calculator

Tax Results

About Nebraska Income Tax

More Tax & Financial Tools