Nebraska's income tax is unremarkable and its property tax is not, and any article that discusses one without the other describes half a state.
The income tax runs three brackets from 2.46% to 4.55%, behind an $8,850 standard deduction. On $85,000 a single filer pays $2,988 and takes home $65,640 — comfortably below the national middle.
Nebraska's effective property tax rate is among the highest in the United States. For a homeowner it is very likely the larger of the two bills, and it is the reason Nebraska's overall tax position is worse than its income tax ranking suggests.
A note before you start. This is general education, not tax advice. Federal figures are tax year 2026, from IRS Revenue Procedure 2025-32 and the Social Security Administration; Nebraska's brackets, deduction, exemption credit and retirement rules come from this site's own sourced 50-state dataset, citing Neb. Rev. Stat. 77-2715 and 77-2716 and the Department of Revenue's Form 1040N and Schedule I instructions. Every dollar figure is computed by the same engine the site's calculators use, on a single filer with no dependents or pre-tax deferrals unless stated. Property tax and sales tax are discussed qualitatively.
1. What Nebraska takes
| Amount on $85,000 | |
|---|---|
| Gross salary | $85,000 |
| Federal income tax | −$9,870 |
| Social Security (6.2%) | −$5,270 |
| Medicare (1.45%) | −$1,233 |
| Nebraska income tax | −$2,988 |
| Take-home | $65,640 |
Across incomes, single filer:
| Salary | Nebraska tax | Effective NE rate | Take-home |
|---|---|---|---|
| $30,000 | $523 | 1.74% | $24,762 |
| $45,000 | $1,168 | 2.60% | $37,170 |
| $60,000 | $1,850 | 3.08% | $48,540 |
| $85,000 | $2,988 | 3.52% | $65,640 |
| $120,000 | $4,580 | 3.82% | $88,670 |
| $175,000 | $7,083 | 4.05% | $123,796 |
The effective rate never reaches even the middle bracket. At $175,000 it is 4.05%, below the 4.55% top rate. The $8,850 deduction, the $176 credit and the graduated slices at the bottom all pull it down.
Run your own salary against Nebraska's brackets2. The brackets, and a credit rather than an exemption
| Taxable income above (single) | Rate |
|---|---|
| $0 | 2.46% |
| $4,130 | 3.51% |
| $24,760 | 4.55% |
Married-joint thresholds are exactly double — $8,250 and $49,530. Head of household sits at $7,700 and $39,620.
For a single filer on $85,000: $8,850 sheltered, $76,150 taxable. $4,130 at 2.46%, $20,630 at 3.51%, $51,390 at 4.55% — $3,164 of tax, less the $176 personal exemption credit, for $2,988.
The $176 is a credit, not a deduction
This distinction is deliberate in Nebraska's statute and it changes what the number is worth.
A deduction reduces the income the rate applies to. A $176 deduction at 4.55% would be worth $8.
A credit reduces the tax itself. Nebraska's $176 comes straight off the bill, so it is worth $176 to everyone — the same dollars to a filer at $30,000 as to one at $300,000.
That is a more progressive design than a deduction of the same nominal size, because it is a larger share of a small bill. Against Nebraska's $523 at $30,000, the credit is 25% of what would otherwise be owed. Against $7,083 at $175,000 it is 2.4%.
It is $176 per exemption for 2026, up from $171 in 2025 and $166 in 2024, claimed on Form 1040N line 18. Each dependent adds another $176.
The rate is coming down
Nebraska legislated a multi-year reduction in its top rate, stepping it down over successive years. The 4.55% figure here is the 2026 rate, and if you are reading this later, check the current one rather than assuming this held.
3. Filing jointly
| Salary | Single NE tax | Joint NE tax | Difference |
|---|---|---|---|
| $30,000 | $523 | $0 | $523 |
| $45,000 | $1,168 | $520 | $648 |
| $60,000 | $1,850 | $1,046 | $804 |
| $85,000 | $2,988 | $2,108 | $880 |
| $120,000 | $4,580 | $3,701 | $879 |
| $175,000 | $7,083 | $6,203 | $880 |
$880 at every income above $85,000, and it settles there once both the doubled deduction and the doubled brackets have done their work. Below that it is smaller, because the couple has not yet used the full width of the lower brackets.
At $30,000 a couple owes Nebraska nothing, since the $17,700 joint deduction plus the doubled low brackets and two $176 credits together cover it.
$880 is a middling joint benefit — larger than Kansas's $857 and Georgia's $748, smaller than Minnesota's $1,264 and Maine's $1,535.
4. What the paycheck actually looks like
On $85,000 as a single filer:
| Pay schedule | Gross per cheque | Net per cheque |
|---|---|---|
| Weekly (52) | $1,634.62 | $1,262.30 |
| Biweekly (26) | $3,269.23 | $2,524.60 |
| Semi-monthly (24) | $3,541.67 | $2,734.98 |
| Monthly (12) | $7,083.33 | $5,469.96 |
Biweekly and semi-monthly are not the same thing. Biweekly is 26 cheques — every other Friday — so two months a year carry three paydays. Semi-monthly is 24, on fixed dates, so every month carries exactly two. The annual total is identical; the monthly cash flow is not, and a biweekly earner budgeting on "two cheques a month" is under-counting by $5,049 a year.
Form W-4N is Nebraska's own withholding certificate, and Nebraska requires it in circumstances where the federal W-4 alone will not produce the right result — particularly since the federal form dropped allowances and Nebraska's system still uses them.
Withholding is an estimate, not the tax. Over-withholding produces a refund; under-withholding a bill.
5. No local income tax of any kind
Nebraska has no local income tax anywhere — no city, county, school district or transit levy.
That was confirmed across three instruments: Form 1040N has no local income tax line anywhere on its three pages and computes total tax without one; the Department's withholding guidance directs employers to state withholding only; and no Nebraska municipality is known to levy one.
A Nebraska take-home figure is complete as stated, which is worth saying because two nearby states are not so simple. Iowa has school district surtaxes that ride on state income tax liability, and Missouri has city earnings taxes in Kansas City and St. Louis. Kansas has no wage tax but does allow a local intangibles tax on interest and dividends.
Nebraska has none of it.
6. Social Security is now 100% exempt
This is a recent change and older sources describe the transition rather than the destination.
Neb. Rev. Stat. 77-2716(14)(a) reduces federal AGI by a percentage of the Social Security benefits included in it, and the percentage was phased in: 5% for 2021, 40% for 2022, 60% for 2023, and one hundred percent for taxable years beginning on or after January 1, 2024.
As of tax year 2026, Nebraska exempts Social Security benefits in full, with no income threshold, no age condition and no phase-out.
Two consequences:
Any guide describing a partial exemption or an income limit is out of date, and the error overstates a Nebraska retiree's tax.
Nebraska is no longer on the list of states that tax Social Security. It used to be. That list has shrunk to eight, and Nebraska's departure from it is recent enough that a great deal of published material has not caught up.
7. Everything else in retirement is taxed
Away from Social Security, Nebraska is among the less generous states, and the reason is an absence rather than a rule.
Private pensions are fully taxable.
Public pensions are fully taxable too — state, local and federal alike. There is no public–private asymmetry here, which is unusual, but in Nebraska's case the symmetry runs the unfavourable way: both are taxed rather than both exempt.
401(k), 403(b) and traditional IRA distributions are fully taxable as ordinary income. That was confirmed by absence rather than assumed: Nebraska taxable income begins from federal AGI on Form 1040N line 5, and Schedule I Part B — the complete list of subtractions, lines 14 through 43 — contains no line for 401(k), 403(b), IRA or general retirement income.
Military retirement is the exception, and the rules changed
Military retirement benefit income is 100% exempt, and it requires no election.
Neb. Rev. Stat. 77-2716(15)(b) provides that an individual may exclude one hundred percent of the military retirement benefit income received, to the extent included in federal adjusted gross income.
The "no election required" part is the update. Nebraska's earlier rules required a retiree to make a timely election to take a partial exclusion, and missing the window forfeited it. That requirement is gone for 2022 forward, and it is a common and confusing point in older material — a military retiree who believes they missed an election deadline should check, because there is no longer a deadline to miss.
| Source | Nebraska treatment |
|---|---|
| Social Security | Exempt in full |
| Military retirement | Exempt in full, no election |
| Public pension (state, local, federal) | Fully taxed |
| Private pension | Fully taxed |
| 401(k), 403(b), traditional IRA | Fully taxed |
| Retirement income, single | Nebraska tax |
|---|---|
| $40,000 all Social Security | $0 |
| $40,000 all 401(k) withdrawals | About $940 |
| $70,000 — $30,000 SS + $40,000 401(k) | About $940 |
For a private-sector saver, Nebraska's retirement position is middling. The Social Security exemption is complete and generous; everything else is taxed at rates up to 4.55%. Kansas, Idaho and Minnesota all do the same thing; Iowa, Illinois and South Dakota all do better.
8. Property tax is the Nebraska story
Nebraska's effective property tax rate on owner-occupied housing is among the highest in the United States — routinely in the top five or six by that measure.
That is not a footnote to the income tax discussion. It is the larger number.
Work through the comparison. A single filer on $85,000 pays $2,988 of Nebraska income tax. A homeowner with a $300,000 house in a typical Nebraska county faces a property tax bill that can exceed that figure substantially — often by a factor of one and a half or more, depending on the county and the school district.
Three reasons it is so high:
Nebraska relies on property tax for school funding to an unusual degree. State aid to local schools is comparatively low, so the local levy has to carry more.
Agricultural land is a large share of the base, and how it is valued has been the central fight in Nebraska tax policy for decades.
There is no local income tax and no local sales tax option comparable to Louisiana's or Alabama's. With income closed off, property does the work.
Nebraska has responded with credit programmes — a property tax credit and a refundable income tax credit for school district property taxes paid, claimed on the income tax return. Both are claimed rather than automatic, and the refundable school district credit in particular is one that Nebraskans routinely fail to claim.
If you own property in Nebraska, checking whether you have claimed that credit is worth more than anything else on this page.
Sales tax sits around the national middle, with a local option layer. Groceries are exempt from the state sales tax.
9. What you should check before comparing Nebraska
Two Nebraska-specific items sit outside the income tax and change the comparison materially.
The refundable school district property tax credit. Nebraska allows a refundable income tax credit for a percentage of the school district property taxes you paid. Refundable means you receive it even if it exceeds your income tax liability, so a retiree owing little income tax can still collect it in cash.
It is claimed on the income tax return and it is routinely missed. The Department has repeatedly noted that a substantial number of eligible Nebraskans do not claim it. For a homeowner with a four-figure school district levy, it is worth more than any deduction discussed in this article.
The separate property tax credit shown on the property tax statement itself is applied automatically, and it is a different thing from the refundable credit above. Having received one does not mean you claimed the other.
And the general point that follows. Nebraska's tax structure loads a great deal onto property tax and then hands some of it back through the income tax return. That design means your actual Nebraska tax position depends on whether you file and claim, in a way it does not in states where the relief is built into the assessment.
For a renter, none of this applies — and a renter in Nebraska therefore faces a straightforwardly modest tax position: fifteenth-lowest income tax of the 41 states that levy one, a mid-range sales tax with groceries exempt, and no property tax bill to reclaim against.
10. Where Nebraska ranks
At $85,000, Nebraska's $2,988 is fifteenth-lowest of the 41 income-tax states.
| State | Tax on $85,000 |
|---|---|
| New Mexico | $2,834 |
| Kentucky | $2,857 |
| North Carolina | $2,883 |
| Nebraska | $2,988 |
| West Virginia | $3,004 |
| Colorado | $3,032 |
Against its six neighbours:
| Salary | NE | IA | MO | KS | CO | SD / WY |
|---|---|---|---|---|---|---|
| $30,000 | $523 | $488 | $473 | $896 | $612 | $0 |
| $45,000 | $1,168 | $1,058 | $1,178 | $1,711 | $1,272 | $0 |
| $85,000 | $2,988 | $2,578 | $3,058 | $3,943 | $3,032 | $0 |
| $175,000 | $7,083 | $5,998 | $7,288 | $8,965 | $7,083 | $0 |
Nebraska sits in the middle of a tightly clustered group. At $85,000 it is $410 more than Iowa, $70 less than Missouri, $955 less than Kansas, and $44 less than Colorado. At $175,000 Nebraska and Colorado are identical to the dollar, which is a coincidence rather than a policy, and a good illustration of how little the headline rate predicts.
South Dakota and Wyoming take nothing, and both border Nebraska. $2,988 a year at $85,000 is the full cost of that line on income tax — but Nebraska's property tax is high and Wyoming's is low, so a homeowner's total gap is considerably larger than the income tax alone.
11. What you can control
Pre-tax deferrals save 4.55% at state level for an $85,000 earner. A $10,000 traditional 401(k) contribution saves $2,200 federally plus $455 in Nebraska tax.
But read section 7. That money is fully taxable in Nebraska when it comes out, at every age. The deferral defers rather than avoids the state tax, which strengthens the Roth case relative to Iowa or Illinois next door, where retirement withdrawals face better treatment.
HSA contributions through payroll cut federal tax, Nebraska tax and FICA. On $4,400 that is roughly $968 federal, $200 Nebraska and $337 FICA — about $1,505, or 34% of the amount contributed.
Capital gains get no state preference. Nebraska taxable income begins from federal AGI, which already includes net capital gain in full, and neither Form 1040N nor Schedule I contains a general exclusion, deduction or preferential rate.
Claim the school district property tax credit. It is refundable, it is claimed on the income tax return, and it is the largest single item most Nebraska homeowners leave on the table.
Frequently asked questions
What is Nebraska's income tax rate? Three brackets: 2.46%, 3.51% and 4.55%, behind an $8,850 standard deduction for a single filer. The top rate is on a legislated path downward.
What is take-home pay on $85,000 in Nebraska? $65,640 for a single filer, after $9,870 federal income tax, $6,503 FICA and $2,988 Nebraska income tax.
Is the Nebraska personal exemption a deduction or a credit? A nonrefundable credit of $176 per exemption, taken against the tax rather than subtracted from income. That makes it worth $176 to every filer regardless of bracket — a more progressive design than a deduction of the same size.
Does Nebraska tax Social Security? No. The exemption phased in at 5%, 40% and 60% before reaching 100% for tax years beginning on or after January 1, 2024. Any source describing a partial exemption is out of date.
Does Nebraska tax my pension or 401(k)? Yes, all of it — private pensions, public pensions and 401(k), 403(b) and IRA distributions alike, at every age. Military retirement is the sole exception and is exempt in full.
Do I need to make an election for the military retirement exclusion? No, not for 2022 forward. Older rules required a timely election and missing it forfeited the benefit. That requirement is gone, which is a common point of confusion in older material.
Can a Nebraska city or county tax my income? No. There is no local income tax of any kind — no city, county, school district or transit levy.
Is Nebraska a low-tax state? On income tax, yes — fifteenth-lowest of the 41 that levy one. On property tax it is among the highest in the country, and for a homeowner that is the larger bill. Judging Nebraska on income tax alone gets it substantially wrong.
What to do next
Nebraska's income tax is modest and its property tax is not. If you own a home here, the property tax credit is worth more of your attention than the rate table.
- Nebraska take-home pay calculator — your salary with every deduction shown separately.
- Nebraska mortgage calculator — where the property tax line does the real work.
- Your Paycheck in the USA in 2026 — all fifty states on one salary.
- Take-Home Pay in South Dakota — no income tax, immediately north.
- 50/30/20 budget calculator — built on take-home rather than salary.
Every figure on this site is sourced and dated. How we source every number.
Figures in this article are illustrations computed by this site's own tax engine for tax year 2026, on a single filer with no dependents or pre-tax deferrals unless stated. Federal figures come from IRS Revenue Procedure 2025-32 and the Social Security Administration; Nebraska's brackets, deduction, exemption credit and retirement rules from this site's sourced 50-state dataset, citing Neb. Rev. Stat. 77-2715 and 77-2716 and the Nebraska Department of Revenue. The scheduled rate reductions, property tax, the school district property tax credit and sales tax are discussed qualitatively rather than computed. This is general education and not tax advice; consult a licensed tax professional for your own situation.