Nebraska has a progressive state income tax with rates ranging from 2.46% to 5.84%. The state has been gradually reducing rates and is scheduled to continue lowering them through 2027.
Nebraska Tax Brackets (2026)
| Taxable Income (Single) | Tax Rate |
|---|---|
| $0 - $3,700 | 2.46% |
| $3,700 - $22,170 | 3.51% |
| $22,170 - $35,730 | 5.01% |
| $35,730+ | 5.84% |
Nebraska is gradually reducing tax rates. The top rate is scheduled to drop to 5.2% by 2027. These figures are based on Nebraska Department of Revenue guidelines.
What You'll See on Your Paystub
A Nebraska worker's paystub includes both federal income tax withholding and state deductions:
| Deduction | Rate | Notes |
|---|---|---|
| Federal Income Tax | Varies | Based on W-4 and income |
| Social Security | 6.2% | Up to $181,200 wage base |
| Medicare | 1.45% | No wage limit |
| Nebraska State Income Tax | 2.46% - 5.84% | Based on income level |
Nebraska Standard Deduction
Nebraska's standard deduction is tied to the federal standard deduction:
| Filing Status | Standard Deduction (2026) |
|---|---|
| Single | $15,420 |
| Married Filing Jointly | $30,840 |
| Head of Household | $23,130 |
Local Taxes
Nebraska has some local occupation taxes:
Omaha Occupation Tax
Omaha imposes an occupation tax on employees who work within city limits:
- Rate: 1% of gross wages
- Cap: $50.25 per pay period (biweekly)
- Annual maximum: $1,306.50
If you work in Omaha, you'll see a separate "Omaha Occupation Tax" deduction on your paystub in addition to state income tax.
Agriculture Industry
Nebraska's agricultural sector has special considerations:
- Seasonal workers may have varying withholding needs
- Farm laborers may be exempt from certain withholding requirements
- Cash wages under $150 per year to a single worker may be exempt
- Self-employed farmers file estimated taxes differently
Nebraska vs. Neighboring States
| State | Tax Structure | Top Rate |
|---|---|---|
| Nebraska | Progressive | 5.84% |
| South Dakota | None | 0% |
| Wyoming | None | 0% |
| Colorado | Flat | 4.4% |
| Iowa | Flat | 3.8% |
| Kansas | Progressive | 5.7% |
Retirement Income
Nebraska is phasing out taxes on Social Security:
- Social Security benefits are being phased out from taxation
- By 2025, Social Security is fully exempt
- Military retirement pay is exempt
- Railroad retirement benefits follow federal treatment
Nebraska's ongoing tax reductions and Social Security exemption make it increasingly attractive for retirees compared to neighboring states like Minnesota.
Comparing Take-Home Pay
Here's how a $75,000 annual salary in Nebraska compares to other states:
| State | Effective Rate | Annual State Tax |
|---|---|---|
| Nebraska | ~4.8% | ~$3,200 |
| South Dakota | 0% | $0 |
| Colorado | ~3.5% | ~$2,600 |