Nebraska state taxes at a glance
| Individual income tax | Graduated (bracket) income tax |
|---|---|
| Rate structure | Graduated rates with a top rate of 4.55% in 2026, scheduled to fall to 3.99% by 2027 under a phase-down. Social Security is fully exempt beginning in tax year 2025. Verify current-year figures. |
| Tax agency | Nebraska Department of Revenue |
| Main individual return | Form 1040N (residents, nonresidents and part-year residents) |
| Local income taxes | No local income taxes. Counties levy inheritance tax on certain inheritances. |
| Sales tax | A 5.5% state rate plus local rates of up to 2%, so combined rates range from 5.5% to 7.5%. |
| Property tax | Assessed by county assessors and levied by local governments and school districts. Nebraska’s property tax burden is high, and the state offers a refundable income tax credit for school district property taxes paid. |
| Retirement & Social Security | Nebraska fully exempts Social Security benefits from state income tax beginning with tax year 2025. Other retirement income is generally taxable; check the Department for any other exclusions that apply to you. |
Verify current-year figures: state rates, brackets, credits and filing rules change. Treat this page as a starting orientation and confirm details on the Nebraska Department of Revenue website.
How Nebraska income tax works
Nebraska taxes income with graduated rates. The Department of Revenue’s 2026 tax calculation schedule shows rates of 2.46% and 3.51% on lower brackets and 4.55% on both the third and fourth brackets, matching Tax Foundation’s 2026 table. State law is lowering the top rate in stages: Tax Foundation notes the top rate fell from 5.2% to 4.55% on January 1, 2026, on the way to 3.99% by 2027. Because the rate is being phased down, use the current-year schedule rather than an older estimate.
Nebraska’s treatment of Social Security is a significant change for retirees. According to the Department’s current return booklet and tax guidance summaries, Nebraska fully exempts Social Security benefits beginning with tax year 2025, with no income threshold: you subtract the benefits included in federal AGI on Schedule I. Other retirement income is generally taxable. Nebraska uses personal exemption credits and the standard deduction is set by the state (Tax Foundation lists $8,850 single for 2026), so your state calculation differs from your federal one.
Property tax is where Nebraskans feel the largest local burden. County assessors value property and local governments and school districts levy taxes. To offset the burden, Nebraska offers a refundable income tax credit based on school district property taxes paid; claim it on your Nebraska return after confirming eligibility with the Department. Nebraska counties also levy an inheritance tax on certain inheritances, which is separate from the income tax. For broader context, see our guide to states without income tax.
Filing your Nebraska return and free options
The Department of Revenue’s NebFile for Individuals is free for eligible full-year Nebraska residents filing original returns, but it supports only Form 1040N, Schedule I and Schedule II, so more complex returns need other software. The Department also lists federal/state online e-file software on its site; many providers have free options depending on income. Check the NebFile page for the tax year you are filing.
Nebraska’s filing deadline matches the federal deadline. See extensions explained, our free filing hub for the federal return, and state refund status for tracking.
For the federal side, see our guides to free federal filing options and the complete guide to filing taxes.
Things Nebraska residents often ask about
- Rate phase-down: the top rate is 4.55% for 2026 and scheduled to fall to 3.99% by 2027.
- Social Security exempt: beginning in tax year 2025, with no income threshold; subtract it on Schedule I.
- School property tax credit: a refundable income tax credit for school district property taxes; claim it on your return.
- County inheritance tax: Nebraska counties levy it on certain inheritances; separate from the income tax.
- NebFile limits: free for eligible full-year residents, original returns only, limited forms.
Official Nebraska links
- Nebraska Department of Revenue
- Nebraska: NebFile for individuals
- Nebraska: federal/state online e-file software
- Federation of Tax Administrators: State tax agencies
Frequently asked questions
What is Nebraska’s top income tax rate?
4.55% for 2026, scheduled to fall to 3.99% by 2027 under the current phase-down.
Does Nebraska tax Social Security?
No. Nebraska fully exempts Social Security benefits beginning with tax year 2025, according to the Department’s return materials.
Is there free state filing in Nebraska?
Yes. NebFile is free for eligible full-year residents filing original Form 1040N returns with limited schedules, and some software providers offer free state filing.
General information only — not tax, legal or financial advice. Tax figures change every year; verify the current numbers at IRS.gov or with a qualified professional. Read the full disclaimer.