Nebraska Tax and CPA Services: State, County and City Taxes

Four Nebraska features change real tax bills: income tax rates that have been stepping down, a full Social Security exclusion, a seven-day threshold for nonresident employees, and city occupation taxes on top of the state sales tax. This profile covers tax year 2025 returns (filed in 2026) and 2026 planning for people and businesses with a Nebraska connection.

Nebraska income tax rates

Nebraska taxes income on a graduated scale. The Department of Revenue's 2025 schedule uses 2.46%, 3.51%, 5.01% and 5.20%, with the starting points below.

The top rate has been falling year to year and the Department publishes a new schedule with each year's forms. The 2026 schedule was not confirmed on an official page for this profile, so check the Department's forms page before projecting 2026 tax. The return starts from federal adjusted gross income.

Social Security, retirement and the Relocation Incentive Act

The 2025 booklet says the entire Social Security benefit included in federal income can be excluded, with no federal income threshold, and military retirees can exclude 100% of military retirement pay. See our Social Security taxation guide.

Nebraska also offers a one-time wage exclusion for people who move to the state for a job. For tax year 2025 the position must pay $70,000 to $250,000 a year, the election must be made within two calendar years of becoming a resident, with recapture if the person does not remain a resident for two full calendar years. Employers can apply for a credit of the lesser of 50% of relocation expenses or $5,000 per qualified employee.

Nonresidents and remote work

For tax years beginning in 2025 or later, the 2026 Circular EN describes a seven-day threshold. Pay is not Nebraska income when a nonresident employee is in the state for a conference or training for seven days or fewer, worked in more than one state and earned $5,000 or less in Nebraska. Past seven days, the circular also describes sourcing out-of-state work to Nebraska when it relates to a Nebraska business and is done for the worker's convenience. The wording is technical, so nonresidents who spend more than a week in Nebraska should have it reviewed.

Nonresidents and part-year residents report total federal income on Form 1040N, and Schedule III apportions the tax by the Nebraska share. Residents who pay tax to another state claim credit on Schedule II. Per the withholding FAQs, wages for work performed in Nebraska are subject to withholding even if the employer is elsewhere. Visa holders who relocate mid-year can read our page for H-1B and visa holders.

Sales tax and city occupation taxes

The Department states the state sales and use tax rate is 5.5%. Local rates change quarterly, so use its Sales Tax Rate Finder by address; its page lists Omaha at 1.5% and Norfolk at 2%, and describes Good Life Districts where a city can add a local option tax. It gives no economic nexus dollar threshold; see our sales tax nexus guide.

Cities may also levy occupation taxes. The Department's occupation tax page names Fremont, Grand Island, Kearney, Lincoln and Omaha as recent adopters, says hotels, car rental firms, telecom providers, restaurants and bars are common targets, and says the business pays the city directly. See our guide to local payroll and business taxes.

Payroll, unemployment and paid sick time

Register for withholding with Form 20. Employers with more than 24 employees must withhold at least 1.5% of taxable wages unless an employee documents a lesser amount. Payments to nonresident non-employees for personal services carry 4% withholding on net payments under $28,000 and 6% at $28,000 or more.

For 2026 the Department of Labor lists unemployment rates from 0.00% to 5.40%, a 1.25% new-employer rate for non-construction businesses (5.40% for construction) and a taxable wage base of $9,000 or $24,000 depending on rate category. Under the paid sick time law, effective October 1, 2025, employers with 11 or more employees accrue one hour per 30 worked, with at least 40 hours a year for 11 to 19 employees and 56 hours for 20 or more. See new hire reporting.

Business entities and PTET

The Nebraska Secretary of State handles entity registration and reports. A partnership or S corporation may elect Nebraska entity-level tax. For tax years after 2022 the election is made on Form PTET-E, by also checking box 5 on the return, and it is irrevocable. Owners take a credit on Schedule K-1N.

Property tax

Counties and the Department's Property Assessment Division administer property tax, and the Division runs the homestead exemption. The Department also describes refundable credits for property taxes paid to school districts and community colleges, claimed on the income tax return with Form PTC.

How we can help

We prepare Nebraska resident, part-year and nonresident returns, review remote employees against the seven-day rule, and handle multi-state tax questions for people moving in or out. We can register withholding and unemployment accounts and run payroll for Nebraska employers. Compare our home state on the Illinois page. This is general information, not personal advice.

Frequently asked questions

General information only, not tax, legal or accounting advice for your situation. Rules, limits and deadlines change; confirm the current rules with the official source or a qualified professional before you act. Reading this page does not create a professional relationship with CPA Tax Payroll and Accounting Corp.