💵 Nebraska Paycheck Calculator

Nebraska Paycheck Overview

Nebraska applies a four-bracket progressive income tax with a top rate of 5.84%, which is in the process of being reduced through recent tax reform legislation. The state is targeting lower rates over the coming years to improve competitiveness with neighboring states, several of which have no income tax at all. Nebraska's economy is grounded in agriculture (one of the nation's top producers of beef, corn, and soybeans), insurance (Mutual of Omaha, Berkshire Hathaway in Omaha), technology (growing startup scene), transportation and logistics, and the military (Offutt Air Force Base). Omaha and Lincoln serve as the state's economic hubs, while smaller communities sustain the agricultural economy that defines much of the state's landscape.

Nebraska Income Tax Brackets for 2026

Nebraska uses four progressive brackets:

• 2.46% on the first $3,700 of taxable income (single) / $7,390 (joint)
• 3.51% on income from $3,701 to $22,170 / $7,391 to $44,350
• 5.01% on income from $22,171 to $35,730 / $44,351 to $71,460
• 5.84% on all income above $35,730 / $71,460

Nebraska provides a standard deduction of $7,900 (single) or $15,800 (joint). For a single worker earning $57,200 annually ($2,200 biweekly), the Nebraska state tax is approximately $2,530 per year, yielding an effective rate of about 4.42%. The top bracket threshold is relatively low ($35,730 for singles), meaning most working adults pay the 5.84% rate on a significant portion of their income.

Here is a worked example for a single filer earning $57,200 gross. After the $7,900 standard deduction, taxable income is $49,300. The first $3,700 is taxed at 2.46% ($91.02), the next $18,470 at 3.51% ($648.30), the next $13,560 at 5.01% ($679.36), and the remaining $13,570 at 5.84% ($792.49), for a total Nebraska tax of roughly $2,211. That works out to about $85 per biweekly paycheck, yielding an effective rate of 3.87%. A higher earner at $85,000 would face taxable income of $77,100 and a Nebraska tax of about $3,836 — an effective rate of 4.51%, showing that the top bracket's impact increases at higher incomes.

Nebraska Credits and Deductions

Nebraska offers several valuable credits and deductions that can meaningfully reduce your state tax burden. The Nebraska Property Tax Credit is a refundable credit based on property taxes paid on your primary residence or farmland, which can be claimed even by renters through their landlord's property tax share. For a homeowner paying $4,500 in property taxes, this credit can return several hundred dollars on the state income tax return. The Nebraska Child and Dependent Care Credit equals 25% of the federal credit, providing up to $600-$1,050 for families with qualifying child care expenses. The state also offers a Beginning Farmer Tax Credit to encourage agricultural succession. For education savings, NEST 529 plan contributions are deductible up to $10,000 per return ($5,000 per beneficiary), saving up to $584 at the top marginal rate. Nebraska provides a refundable EITC supplement equal to 10% of the federal credit, putting additional dollars back into qualifying workers' pockets.

Nebraska's Tax Reduction Plans

Nebraska has enacted legislation to gradually reduce income tax rates over the coming years. The top rate is scheduled to decline from 5.84% toward a target in the low 5% range, contingent on revenue performance. The state has also addressed property tax relief as a major priority, with various credit and refund programs designed to reduce the impact of Nebraska's historically high property taxes. For workers, the income tax reductions mean gradually increasing take-home pay over the coming years without any action required — the changes will flow through automatically to withholding tables.

Cost of Living Considerations

Nebraska's cost of living is approximately 8-10% below the national average, making it an affordable place to live and work. Omaha's median home price is roughly $280,000 with two-bedroom rents averaging $1,000-$1,300, providing excellent value for a metro area of nearly 1 million people. Lincoln sits at approximately $270,000 with rents around $950-$1,200. Smaller cities like Grand Island ($210,000 median), Kearney ($230,000), and North Platte ($190,000) are significantly more affordable with rents below $900. Omaha's cost of living is particularly notable because the city offers a robust cultural scene, excellent dining, and strong schools at prices well below comparable metro areas. Heating costs during Nebraska's cold winters add $1,800-$3,500 annually, and vehicle ownership is essentially mandatory outside of central Omaha and Lincoln.

Employment and Economy

Nebraska boasts one of the lowest unemployment rates in the nation, consistently hovering around 2.0-2.5%, reflecting a tight labor market that benefits workers through competitive wages and abundant job opportunities. Omaha is home to five Fortune 500 companies, including Berkshire Hathaway, Mutual of Omaha, Union Pacific Railroad, Kiewit Corporation, and TD Ameritrade (now Schwab). The insurance and financial services sector is the largest private employer in the metro. Agriculture dominates the state's rural economy, with Nebraska ranking first nationally in great northern bean production, second in corn for grain, and among the top three in cattle. The military is a major presence through Offutt Air Force Base near Bellevue, home to U.S. Strategic Command and supporting over 10,000 jobs. Technology has emerged as a growing sector, with Omaha and Lincoln attracting software companies and startups. The median household income in Nebraska is approximately $71,000, above the national median, and Omaha-area wages in finance, tech, and healthcare frequently exceed $65,000-$90,000 for experienced professionals.

Tips for Nebraska Workers

• Track annual rate reductions — Nebraska is phasing in lower rates; adjust your financial projections to account for gradually increasing take-home pay.
• Claim the property tax credit — Nebraska provides a refundable income tax credit based on property taxes paid (including through rent), helping offset the state's high property tax rates.
• Contribute to the Nebraska 529 plan — NEST 529 contributions are deductible up to $10,000 per return ($5,000 per beneficiary) from Nebraska taxable income.
• Explore the child and dependent care credit — Nebraska offers a non-refundable credit equal to 25% of the federal child and dependent care credit, providing additional relief for working parents.
• Maximize retirement contributions — at the 5.84% marginal rate, every $1,000 in 401(k) contributions saves $58.40 in state tax. Contributing the full $24,500 annual limit saves $1,372 in Nebraska tax alone, plus federal savings.
• Leverage the refundable state EITC — Nebraska's 10% supplement to the federal EITC means a qualifying family receiving $4,000 in federal EITC gets an additional $400 from the state.
• Consider the homestead exemption — qualifying homeowners (age 65+, disabled, or certain veterans) can receive property tax exemptions that reduce or eliminate property taxes on their primary residence.

How Nebraska Compares to Neighboring States

Nebraska's 5.84% top rate is higher than several neighbors. South Dakota and Wyoming have no income tax, creating a dramatic difference for workers near those borders. Colorado's flat 4.4% is lower. Kansas tops at 5.7%, very close to Nebraska's rate. Iowa's rates are declining toward 3.9%, which will be substantially lower. Missouri's 4.8% top rate is also below Nebraska's. Among its immediate neighbors, Nebraska has the highest income tax rate of any state it borders except Colorado's FAMLI-inclusive burden. In dollar terms, a worker earning $57,200 pays approximately $2,211 in Nebraska state tax versus zero in South Dakota or Wyoming, roughly $1,700 in Iowa (declining), and about $1,900 in Kansas. The property tax credit and planned rate reductions partially offset this disadvantage, but workers in border communities — particularly the Sioux City and Omaha areas near South Dakota and Iowa — may find meaningful savings by relocating across state lines while commuting to Nebraska jobs.

For families evaluating a move to Nebraska, the total financial picture extends well beyond income tax. Nebraska's property taxes are among the highest in the nation, with the average effective rate around 1.63% — roughly 60% above the national average. On a $280,000 Omaha home, property taxes run approximately $4,564 per year, compared to $2,856 at the national average rate. Douglas County (Omaha) and Lancaster County (Lincoln) tend to have slightly higher rates than rural areas, though agricultural land also faces significant property tax assessments. The state has responded to widespread concern about property tax levels by implementing the refundable property tax credit on the income tax return, and in 2024 passed additional legislation directing more state aid to school districts to reduce local property tax levies. Workers considering Nebraska should calculate their combined income tax plus property tax burden and compare it to the total burden in neighboring states. For a homeowner earning $57,200 with a $280,000 home, the combined Nebraska income and property tax burden totals roughly $6,775 per year, compared to approximately $5,040 in Iowa (declining income tax plus $4,340 property tax on a similar home) or $4,564 in property taxes alone in South Dakota with zero income tax. These comparisons underscore why Nebraska's ongoing tax reform efforts — targeting both income and property tax relief — are critical to the state's long-term competitiveness for attracting and retaining workers.

Frequently Asked Questions

What is Nebraska's top income tax rate?

Nebraska's top marginal rate is 5.84% on income above $35,730 (single) or $71,460 (joint). This rate is scheduled to decrease through legislated tax reform. Most working adults pay this rate on a significant portion of their income due to the relatively low threshold. For a worker earning $57,200, the effective rate after the standard deduction is approximately 3.87%, or about $85 per biweekly paycheck.

Does Nebraska have local income taxes?

No. Nebraska does not impose any local, city, or county income taxes on wages. The progressive state income tax is the only income tax on your paycheck. However, Nebraska does have notably high property taxes that vary by county, which should be factored into your overall tax planning.

Is Nebraska reducing its income tax?

Yes. Nebraska has enacted legislation to gradually lower income tax rates over the coming years. The top rate is targeted to decline from 5.84% into the low 5% range, subject to revenue performance. The state has also been expanding property tax relief measures and phasing out taxation of Social Security benefits as part of its broader tax competitiveness strategy.