If you’ve lived in Nebraska for more than a minute, you know the "Good Life" usually comes with a pretty hefty price tag—specifically on your property tax bill. It’s the local pastime to complain about it. But honestly, the landscape is shifting faster than a Sandhills blowout. Since the 2024 special session and the implementation of massive bills like LB 34 and LB 754, the rules of the game have changed for your 2025 and 2026 filings.
Basically, the state is trying to move away from a "you have to ask for it" model to a "we’ll just give it to you" model. But like anything involving the government, there are catches.
Nebraska Tax Law Changes: The Death of the "Claim It Later" Property Credit
For years, the Nebraska Property Tax Incentive Act was a bit of a headache. You’d pay your high school district taxes, then you’d have to remember to claim a refundable credit on your income tax return months later. If you forgot? Tough luck.
Starting with the 2024 tax statements (the ones you likely just paid or are dealing with now), that’s mostly over. LB 34 effectively "frontloaded" this relief. Instead of waiting for a refund check, the state applied roughly $750 million directly to property tax bills across the state.
What most people get wrong is thinking all their property tax credits are now automatic. They aren't.
- School District Credits: These are now automatic on your bill (roughly a 30% reduction).
- Community College Credits: You still have to claim these on your Form PTC when you file your income taxes.
- The Catch: If you have "leftover" credits from 2022 or 2023 that you never claimed, you can still go back and get them using Form PTCX, but the window is closing.
Income Tax Rates are Dropping (Again)
Governor Jim Pillen has been pretty vocal about wanting to get the top income tax rate down to 3.99% by 2027. We aren't there yet, but we're close. For the 2025 tax year, the top marginal rate dropped to 5.20%.
Wait, it gets better. For the tax year beginning January 1, 2026, that top rate is scheduled to tumble again to 4.55%.
It’s kind of a big deal because Nebraska used to be one of the highest-tax states in the Midwest for high earners. By the time 2027 rolls around, the state will likely only have three tax brackets instead of the four we’ve been used to for decades.
| Tax Year | Top Individual Rate | Top Corporate Rate |
|---|---|---|
| 2024 | 5.84% | 5.84% |
| 2025 | 5.20% | 5.20% |
| 2026 | 4.55% | 4.55% |
| 2027 (Projected) | 3.99% | 3.99% |
Remote Workers and the "7-Day Rule"
If you live in Colorado or Iowa but work for a company based in Lincoln or Omaha, the "Convenience of the Employer" rule used to be a total nightmare. Nebraska basically said, "If your job could be done in Nebraska, we’re taxing you here," even if you never stepped foot in the state.
That’s changed thanks to LB 1023.
Starting in 2025, Nebraska can only tax a nonresident’s income if they are physically present in the state for more than 7 days during the year. If you’re a remote worker who only visits the home office once a year for a Christmas party, you’re likely off the hook for Nebraska state income tax. This is a massive win for regional talent recruitment.
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Business Goodies: Research and Equipment
For the business owners out there, 2026 is going to be a "gold rush" year for deductions.
First, there’s a new immediate deduction for business assets. Starting in 2026, you can deduct 60% of the cost of "qualified property" (think machinery or equipment) in the very first year it’s put into service. The other 40% gets depreciated over five years.
Second, the state is finally playing nice with Research and Development (R&D). Also starting in 2026, you can elect to treat R&D expenses as fully deductible in the year you pay them. This is a pivot away from some of the federal changes that forced businesses to amortize those costs over several years.
The Weird and Specific Credits You Might Miss
Nebraska loves a niche tax credit. If you aren't looking for these, you're essentially leaving money on the table.
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- The Reverse Osmosis Credit: If your well water tests high for nitrates (10 ppm or higher), you can get a one-time refundable credit of up to $1,000 to install a filtration system. This is a direct response to the water quality issues in rural parts of the state.
- The Caretaker Tax Credit: If you’re taking care of an aging parent or a family member with disabilities, you might be eligible for a credit of 50% of your expenses (capped at $2,000 or $3,000).
- Relocation Incentive: If a company pays to move you to Nebraska, there’s now a refundable credit for the employer to help offset those costs. It’s basically the state's way of saying, "Please move here, we have corn and low unemployment."
Why This Matters for 2026
The reality is that Nebraska is in the middle of a massive fiscal experiment. The state is betting that by slashing income taxes and frontloading property tax relief, they can stop the "brain drain" to states like Florida or Texas.
But you have to be proactive. Because the school district credit is now automatic, many people think they don't need to look at their taxes as closely. That’s a mistake. If you don't check for the Community College credit or the Caretaker credit, you’re still overpaying.
Actionable Next Steps
- Audit your property tax bill: Look for the line item labeled "School District Property Tax Relief Credit." If it's not there and you own property, call your county assessor immediately.
- Track your out-of-state days: If you're a nonresident working for a Nebraska firm, keep a log. Once you hit day 8, the tax rules change.
- Plan big purchases for 2026: If you need new equipment for your business, waiting until 2026 could net you that 60% immediate deduction.
- File Form PTC: Even though school credits are automatic, the community college portion is still sitting there waiting for you to claim it. Don't leave it to the state.