Nebraska has a progressive income tax system, meaning you pay taxes based on your taxable income. The 2023 income tax rates range from 2.46% to 6.84%, with deductions and credits that make the overall tax burden easier for many people. The income tax is a taxable source of revenue for the state, and it’s used to fund education and other services. In addition to income tax, Nebraska has a sales tax. Businesses making retail sales in the state must register, collect, and remit the state sales tax. Localities can add as much as 2.5% to the total sales tax rate. If you’re planning to retire in Nebraska, it’s important to understand how taxes affect your financial goals. A financial advisor can help determine how taxes fit into your financial plan.
Despite Nebraska’s low overall tax burden, its high property and income taxes can significantly drain retirement income. The state taxes most Social Security benefits received by seniors with income above a threshold amount and taxes other forms of retirement income, including public and private pensions and IRA withdrawals.
Nebraska Income Tax Brackets
The Nebraska tax brackets are important to the state’s tax code. Each bracket is designed to help keep your hard-earned dollars in the state while also promoting responsible spending and saving. A good tax calculator can be invaluable when it comes to reducing your tax bill. A top-rated tool can simplify your tax calculations and streamline your tax filing process – all while showing you which items to write off and which ones to leave on the table.
Single Filers
| Income | Rate |
| $0 – $3,340 | 2.46% |
| $3,341 – $20,590 | 3.51% |
| $20,591 – $33,180 | 5.01% |
| $33,181+ | 6.84% |
Married Filing Jointly
| Income | Rate |
| $0 – $6,860 | 2.46% |
| $6,861 – $41,190 | 3.51% |
| $41,191 – $66,360 | 5.01% |
| $66,361+ | 6.84% |
Head of Household
| Income | Rate |
| $0 – $6,410 | 2.46% |
| $6,411 – $32,950 | 3.51% |
| $32,951 – $49,200 | 5.01% |
| $49,201+ | 6.84% |
