What to know about filing a Nebraska state tax return

The Omaha, Nebraska skyline in Autumn. Omaha residents, like all Nebraska residents, must consider if they have to file a Nebraska state tax return. The Omaha, Nebraska skyline in Autumn. Omaha residents, like all Nebraska residents, must consider if they have to file a Nebraska state tax return. Image:

In a Nutshell

Nebraska is the only U.S. state with just one legislative house; most have two, like the federal government’s House and Senate. But while its unicameral Legislature is unique, the Cornhusker State has a state-level income tax that has a lot in common with the tax systems of other states.

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It’s hard to think of Nebraska without invoking the image of Warren Buffett, its famed resident billionaire known as the “Oracle of Omaha,” and corn, its famous agricultural product.

But whether you’re a Buffett-level investor or a corn farmer, if you live in and earn income in the Cornhusker State, you probably need to file a Nebraska state tax return. Here are some things to know about filing taxes in Nebraska.


The basics of Nebraska state tax

Many states only tax the income earned within their borders. But full-time Nebraska residents are taxed on their federal adjusted gross income, or AGI, even if a portion of that income is from sources outside the state — although you may be able to get a credit for taxes paid to another state. If you lived in the state for part of the year or lived elsewhere and earned income from Nebraska sources, you must report your total federal AGI on Nebraska state income tax forms, but you’ll be subject to state tax only on the Nebraska income you earned.

Taxing body

The Nebraska Department of Revenue is in charge of processing state tax forms and collecting taxes in Nebraska. If you have questions or need additional information, you can call the department at 1-800-742-7474 or 1-402-471-5729, or submit a question online. You can also get walk-in help at one of the state’s taxpayer assistance offices in Lincoln, Norfolk, North Platte, Omaha and Scottsbluff.

Filing and payment deadline

You must file your Nebraska tax return and pay any tax due by April 15, unless the 15th falls on a weekend or holiday, in which case the filing and payment deadline will be the next business day.

If you need more time to file your federal and state returns, you can get an automatic six-month state filing extension when you file your request for an extension of your federal tax filing deadline. If you only need an extension on filing your state return, you can submit a Form 4868N by the annual deadline. The maximum extension allowed is six months from the date the return was originally due. However, you must pay any tax due by the original April deadline to avoid interest charges and late-filing and payment penalties.

Filing statuses

On your Nebraska state tax return, you must use the same filing status as you use for your federal return in four situations: single, married filing jointly or surviving widow/widower, married filing separately, and head of household.

The exception is in the status of married filing jointly where only one spouse is a Nebraska resident and the other lives in the state for part of the year or in another state for the entire tax year. In that case, taxpayers can choose to file as married filing jointly on their Nebraska return, in which case both spouses will be taxed as residents, or they can file as married filing separately.

Learn more about federal income tax rates and tax brackets

Nebraska income tax rates

Nebraska has a progressive tax system, which means that as your income rises, a higher tax rate will apply to your income. The tax rates for 2018, based on filing status and income brackets, will likely be 2.46%, 3.51%, 5.01% and 6.84% of Nebraska taxable income.

Tax rate Taxable income for single or married filing separately Taxable income for married filing jointly and surviving spouses Taxable income for head of household
2.46% More than $0–$3,150 More than $0–$6,290 More than $0–$5,870
3.51% $3,151–$18,880 $6,291–$37,770 $5,871–$30,210
5.01% $18,881–$30,420 $37,771–$60,840 $30,211–$45,110
6.84% $30,421 and over $60,841 and over $45,111 and over

 

Of course, there’s more to calculating your tax than just knowing your tax bracket and tax rates. For each tax bracket, there is also an additional amount of tax to pay.

Nebraska standard deductions and exemptions

Nebraska taxpayers who didn’t itemize deductions on their federal returns can take a state-level standard deduction based on the filing status they used on their federal return. Deduction amounts are:

  • $6,750 for single taxpayers and those married filing separately
  • $9,900 for heads of household
  • $13,500 for taxpayers married filing jointly

There’s an additional standard deduction of $1,300 for married taxpayers and $1,600 for single or head of household taxpayers who were allowed additional federal standard deduction amounts because of age or blindness. If you are older than 65 and blind and qualify for both additional deductions on your federal return, your additional deduction is doubled to $3,200.

You can also take some deductions without having to itemize, and you’d record them on the state’s Schedule 1. Some deductions available in 2018 include:

  • Social Security income – If you had Social Security income less than a set limit (in 2018, $58,000 or less for married filing jointly or $43,000 or less for all other filing statues) you can deduct that income from your taxable income. Other limitations apply, as well.
  • Nebraska Enable Savings Plan account contributions – If you made contributions to a Nebraska ABLE account, you may be able to deduct up to $10,000 of the contributions ($5,000 if married filing separately). Restrictions and limitations apply.

Nebraska also allows taxpayers to take a personal exemption credit of $134 on their state returns for the taxpayer, their spouse and each dependent named on their state returns, except if that person can be claimed for a child credit or dependent credit on another taxpayer’s federal return.

Itemized deductions

If you itemized deductions on your federal return, you can choose to either itemize the same amount on your state return (less any state or local income taxes included in the deductions) or take the state’s standard deduction, whichever is greater.

FAST FACTS

What's the difference between a tax credit and a tax deduction?

A tax deduction reduces the amount of income you pay taxes on and could help reduce the amount of tax you owe. Tax credits are dollar-for-dollar reductions in the amount of tax you owe.

Some tax credits, like the federal earned income tax credit, may even increase your refund. If the refundable tax credit lowers your tax bill to zero, you may be able to get any remaining balance of the credit as a refund. 

Learn more about tax deductions vs. tax credits.

Nebraska state credits

In addition, eligible taxpayers may be able to claim some state-specific credits and deductions. In 2018, these include:

  • Credit for volunteer emergency responders – This $250 refundable tax credit is available to qualifying active volunteers, including volunteer emergency responders, rescue squad members and firefighters.
  • Credit for child/dependent care – Qualifying resident taxpayers may be able to claim a credit equal to 25% of the federal credit.
  • School readiness tax credit – This is available to people who own or operate an eligible child care or educational program serving children participating in certain child care subsidy programs.
  • Beginning farmer tax credit – This refundable credit can help individuals get a head start in farming.

How to file your Nebraska state tax

You can file your Nebraska individual income tax return electronically or by mail.

If you go the electronic route:

  • You can e-file both your federal and Nebraska state tax returns with help from a tax preparer or by using an online program listed on the state website, such as the free Credit Karma Tax® service. Although Credit Karma Tax® never charges to file your federal and single-state tax returns, some vendors may charge fees depending on your income, age and other factors. So review terms and conditions before signing up.
  • You can use the Department of Revenue’s NebFile portal. The free service is available to full-year Nebraska residents who meet certain eligibility requirements.

If you want to file paper returns:

Download individual income tax forms from the state website, fill them out and mail them with relevant tax documents to one of these addresses.

If you expect a refund or don’t owe taxes:
Nebraska Department of Revenue
PO Box 98912
Lincoln, NE 68509-8912

If you owe a tax payment:
Nebraska Department of Revenue
PO Box 98934
Lincoln, NE 68509-8934

What to know about filing taxes in more than one state

If you owe and can’t pay

If you can’t pay your tax due by the April deadline, contact the Nebraska Department of Revenue to arrange a payment plan. You can visit the Request a Payment Plan page for information on how to request a plan to pay in installments over time.

A payment plan doesn’t prevent you from incurring penalties and additional costs for paying taxes late. Interest will begin accruing after the April 15 deadline at a rate of 3%.

Tracking your Nebraska tax refund

You can check your refund status online on the state revenue department website. You’ll need to provide your Social Security number, your filing status and the expected amount of your refund rounded to the nearest dollar.

If you filed your Nebraska state tax return electronically, refunds may take at least 30 days to be received. If you submitted a paper return, you can expect a three-month wait.


Bottom line

Nebraska wants to help you by offering resources on security and identity theft as well as valuable income tax deductions and credits — the beginning farmer tax credit alone is expected to reduce the state’s tax revenue by more than $1 million in 2018. So make sure you understand not only the rules for filing your Nebraska state tax return but also the different credits that allow you to reduce your tax liability. Then you can start growing any refund amount by following the Buffett rules of investing.