Key Tax Facts: Nebraska
- Top rate dropping toward 3.99% by 2027
- Social Security benefits are exempt starting 2025
- Military retirement pay is fully exempt
- No deduction for federal income taxes paid
Estimate Your 2025 Federal and Nebraska State Income Tax
Nebraska State Income Tax Overview
Nebraska uses a graduated income tax with four brackets from 2.46% to 5.20% for single filers, reaching the top rate above $38,870. L.B. 754, enacted in May 2023, cut the top rate from 5.84% in 2024 to 5.20% in 2025 and schedules further reductions to 3.99% by 2027. The standard deduction is $8,600 for single filers and $17,200 for married couples. Nebraska exempts Social Security income for residents with federal AGI below $44,460 for single filers and $59,100 for married couples, with a partial exemption above those thresholds. Most other retirement income, including IRA distributions and private pensions, remains taxable.
What Is Different About Nebraska's Income Tax
Deductions and exemptions
Nebraska's standard deduction is $8,600 for single filers and $17,200 for joint filers for 2025, and filers who itemized federally can itemize with state tax paid removed. Personal exemption credits of $166 per person apply instead of exemption deductions.
Credits worth knowing
The state earned income credit is 10% of the federal credit. Nebraska's refundable property tax credit reimburses a percentage of school district property taxes paid, claimed on the income tax return, and there is a child and dependent care credit for lower-income households and a credit for taxes paid to other states.
Retirement, capital gains, and other income
Social Security became fully exempt in tax year 2024, and military retirement pay is fully exempt. Pensions, 401(k), and IRA withdrawals are taxed at the regular 2.46% to 5.2% brackets, with the top rate scheduled to fall to 3.99% by 2027. Capital gains are taxed as ordinary income, with an exclusion for gains on stock of a Nebraska employer.
Rules summarized from the Nebraska Department of Revenue guidance for tax year 2025. Amounts that index annually are described in general terms; confirm the current figure on the official form instructions.
Nebraska Income Tax Brackets (2025)
These are the Nebraska state income tax brackets for tax year 2025. Nebraska applies the same brackets to all filing statuses. Only the income within each bracket is taxed at that rate -- not your entire income.
| Taxable Income | Tax Rate |
|---|---|
| $0 - $4,030 | 2.46% |
| $4,030 - $24,120 | 3.51% |
| $24,120 - $38,870 | 5.01% |
| Over $38,870 | 5.2% |
Source: Nebraska Department of Revenue. Nebraska applies these brackets to all filing statuses.
What a Nebraska Resident Actually Pays: A Worked Example
Your effective tax rate is almost always lower than your top bracket. Here is how the math works for a single filer earning $65,000.
Where Nebraska Stands Among the 50 States
Nebraska's top rate of 5.2% ranks #21 of the 41 states that tax wages. The median top rate across those 41 states is 5.2%, so Nebraska is right at the middle of the pack. It is one of 27 states with a graduated schedule, using 4 brackets; the top rate starts at $38,870 of taxable income, and the lowest bracket ends at $4,030.
On sales tax the picture is similar: Nebraska's combined state and average local rate of 6.94% ranks #29 of 50, against a national median of 7.00%.
Nebraska State Tax at Five Income Levels (2025, single filer)
| Taxable income | Nebraska tax | Effective rate | Marginal rate |
|---|---|---|---|
| $40,000 | $1,602 | 4.01% | 5.2% |
| $65,000 | $2,902 | 4.46% | 5.2% |
| $100,000 | $4,722 | 4.72% | 5.2% |
| $150,000 | $7,322 | 4.88% | 5.2% |
| $250,000 | $12,522 | 5.01% | 5.2% |
Brackets applied directly to the taxable-income figure shown, before Nebraska-specific deductions, exemptions, or credits. Federal tax is separate and comes on top of every row.
Nebraska vs. Its Neighbors on $75,000 of Taxable Income
A Nebraska resident with $75,000 of taxable income pays about $3,422 in state income tax. Of Nebraska's 6 neighboring states, 5 would tax that income less and 1 would tax it more.
Frequently Asked Questions -- Nebraska Income Tax
Does Nebraska have a state income tax?
Yes. Nebraska imposes a state income tax with a top marginal rate of 5.2%. This is separate from your federal income tax obligation.
What is the Nebraska income tax rate for 2025?
Nebraska uses a graduated income tax system with rates from 2.46% to 5.2%. Only the income within each bracket is taxed at that bracket's rate -- not your entire income.
Do I have to file a Nebraska state tax return?
Most full-year Nebraska residents with income above the state filing threshold must file a state return. Check the Nebraska Department of Revenue for current thresholds and requirements.
How accurate is this estimate?
The federal figure uses the official IRS 2025 brackets and standard deduction. The Nebraska figure applies the 2025 single-filer rate schedule to the same taxable income; it does not model Nebraska-specific deductions, exemptions, credits, or local income taxes, so treat it as a planning number and confirm with the Nebraska Department of Revenue or a tax professional before filing.
How does Nebraska compare with nearby states?
On $75,000 of taxable income, Nebraska collects about $3,422. South Dakota collects $0, Wyoming collects $0, Iowa collects $2,850, Colorado collects $3,300, Missouri collects $3,349, Kansas collects $4,098. See the comparison table above.
Where does Nebraska rank on state income tax?
Nebraska's top rate of 5.2% ranks #21 of the 41 states with an income tax, against a median top rate of 5.2%. Its combined sales tax of 6.94% ranks #29 of 50.
Does this calculator include federal income tax?
Yes. It estimates your 2025 federal income tax using the official IRS 2025 brackets, then applies the Nebraska rate schedule to the same taxable income and shows both figures plus the combined total.
Where can I find official Nebraska tax forms?
Official forms, instructions, and filing guidance are available at the Nebraska Department of Revenue.
What is the sales tax rate in Nebraska?
Nebraska's combined state and average local sales tax rate is 6.94%. This is separate from income tax and applies to most retail purchases -- use our sales tax calculator to check a specific purchase.
When are Nebraska 2025 state taxes due?
2025 taxes are generally filed in 2026. The Nebraska filing deadline is April 15, 2026, the same as the federal deadline.
Understanding Your Nebraska Tax Estimate
Your results combine two separate bills: federal tax owed to the IRS, and Nebraska state tax owed to the Nebraska Department of Revenue. The state return is filed separately from your federal Form 1040, with a state filing deadline of April 15. For the mechanics of how bracket math actually works -- why your effective rate is almost always lower than your top bracket -- see our marginal vs. effective tax rate guide.
Lowering Your Nebraska Bill
Pre-tax retirement contributions reduce your federal and Nebraska taxable income in the same move -- see our 401(k) contribution limits and HSA limits guides for the current caps. Beyond that, Nebraska-specific credits and deductions that don't exist at the federal level are listed at the Nebraska Department of Revenue -- worth checking, since these are easy to miss if you only look at federal guidance.
Combined Sales + Income Tax Picture
Nebraska's combined state-plus-average-local sales tax rate is 6.94%. If you're self-employed, that's an added layer on top of income tax -- our self-employment tax calculator covers the SE-specific piece separately.
Disclaimer: Estimates for educational purposes only. State tax results are approximations based on published bracket data and do not account for all deductions, credits, exemptions, local taxes, or individual situations. Not tax, legal, or financial advice. Consult the Nebraska Department of Revenue or a qualified tax professional for guidance specific to your situation.