August 8, 2021
Each tax season, numbers are crunched and refunds distributed. In this article, we help you determine your Nebraska state taxes refund and rates that play a crucial role in your income tax returns.
This article sheds light on the seemingly complex world of taxation, tax brackets, and more, especially if you’re a Nebraska resident, wondering how to calculate your taxes and refunds.
We also cover important factors related to Nebraska state income tax rates, such as deductions, credits, and penalties.
Taxes in Nebraska
Nebraska, unlike other states, taxes residents on their federal adjusted gross income (AGI)—even if a part of the income comes from another state. (You might be able to get credit for taxes you paid in another state.) For many people taxes are complex, and how about you?
Nebraska tax rates are set by and paid to the Nebraska Department of Revenue, which you can reach at 1-800-742-7474 or 1-402-471-5729. Taxes you’re required to pay in Nebraska include:
- Personal income tax
- Sales taxes
- Personal and real property taxes
- Inheritance and state taxes
Nebraska law imposes a progressive tax system, which means you pay higher income taxes as your income increases. Knowing your income according to the tax bracket, however, isn’t the only matter to consider when calculating your Nebraska tax rate.
Nebraska is a high tax state—near the top third in terms of per capita tax and percentage of personal income. You can, however, claim state-specific tax credits if you meet eligibility requirements. Standard deductions and exemptions also allow you to lower your overall tax burden, as long as you’re eligible.
Nebraska Income Tax Rate
To date (2021), Nebraska classifies income taxes in four brackets, including:
Single Taxpayers Living and Working in the State
|Salary Range||% on taxable income|
|First $3,290 of taxable income||2.46%|
|Between $3,291 and $19,700||3.51%|
|Between $19,701 and $31,750||5.01%|
Married Taxpayers Living and Working in the State
|Salary Range||% on taxable income|
|First $6,570 of taxable income||2.46%|
|Between $6,571 and $39,410||3.51%|
|Between $39,411 and $63,500||5.01%|
Nebraska tax brackets have increased over the years because of their progressive nature.
Sales tax refers to taxes on the sale, transfer, or exchange of taxable products or services at the point of sale. This tax is added to the price of a product or service. If you’re a business owner, you might want to start using a tax software for businesses.
Use tax is levied on the storage, use, or consumption of a product or service that hasn’t been charged with sales tax. Use and sales taxes are mutually exclusive, meaning the former is complementary to the latter.
In most states, the sales and use tax rates are the same. The sales and use tax rate in Nebraska is currently set at 5.5%.
The table below shows the chronology of Nebraska’s individual tax income tax rates over the years, as well as its sales and use tax rate.
|Year||Tax Bracket||Sales and Use Tax Rate|
|2013 – 2021||2.46%||3.51%||5.01%||6.84%||5.5%|
|2003 – 2012||2.56%||3.57%||5.12%||6.84%||5.5%|
|1997 – 2002||2.51%||3.49%||5.01%||6.68%||5.5%|
|1993 – 1996||2.62%||3.65%||5.24%||6.99%||5.5%|
Source: Nebraska Tax Rate Chronologies
From 1993 to 2021, the sales and use tax rate has remained steady at 5.5%. Through the decades, however, income tax rates have moved up and down across the four Nebraska state tax brackets.
Nebraska Standard Deduction and Sales Tax Exempt 2021
Income tax deductions are expenses you can subtract from your gross pre-tax income. These are great ways to lower your overall income tax and maximize your refund.
If you don’t itemize deductions on your federal government returns, you can take a state-level standard deduction based on your filing status. For 2021, the standard deductions are:
- $7,100 for single filers
- $14,200 for joint filers
In 2020, those figures were slightly lower at $7,000 for single filers and $14,000 for joint filers. In 2019, the deductions were much lower across Nebraska income tax brackets:
- $6,900 for single filers
- $13,800 joint filers
If you’ve itemized deductions on your federal returns, you can either itemize the same amount on your state return (minus any state or local taxes in the deductions) or take Nebraska’s standard deduction—whichever is greater.
To further lower your Nebraska state tax rate, you can apply for tax exemptions, which entitle you to various sales tax exemptions to reduce your taxable income.
Nebraska Tax Credits
A tax credit refers to money that you subtract from your taxes. Note that deductions are subtracted from your taxable income, while tax credits are subtracted from what you owe. Tax credits are preferred over deductions because they reduce your tax liability, dollar-for-dollar.
In each tax bracket in Nebraska, taxpayers who qualify for federal credit are automatically eligible for tax credits for workers and families. One great example is the earned income tax credit (EITC), a refundable tax credit available to low-income, working taxpayers. The refund rate is equal to 10% of your federal EITC.
Moreover, property owners in Nebraska can benefit from property tax credits (tax deductions on owned properties used for personal use). Taxes paid on rental or commercial properties cannot be deducted from the owner’s Nebraska state income tax rates.
In the tax year 2020, Nebraska established the Nebraska Property Tax Incentive Act, which provides a refundable income tax credit to individuals, corporations, fiduciaries, and financial institutions. The current credit percentage is 6%, which applies to any taxpayer who pays school district property taxes or those levied by a school district on real property. The credit is available for all taxpayers.
Filing a Nebraska State Taxes Refund
A tax refund is a reimbursement you receive for any excess amount paid to the state or federal government. To receive a tax refund check, you first need to file your income tax returns.
You can file income taxes in Nebraska by using NebFile (Nebraska’s online tax filing system) or by the US postal service.
When using NebFile, you must:
- Confirm whether you’re eligible to use NebFile.
- Complete the online registration form.
- Check your email to receive your password.
- Make sure you have all necessary forms (W-2 and 1099 forms), showing your income tax withholding.
- Enter data into the NebFile. Make sure you enter the correct details relative to your Nebraska state tax bracket.
When using the US Postal service, you must:
- Send it to the correct address (note the list of Nebraska postal addresses for tax returns).
- Use the correct postage.
- Meet the postmark deadline.
You can purchase a Certificate of Mailing at the post office, which provides official proof that you had mailed your documents on a certain day.
Additionally, you must follow certain Nebraska income tax filing requirements. You must file income tax returns if you’re a Nebraska resident who:
- Is required to file a federal income tax return, reporting a federal tax liability before credits.
- Has $5,000 or more in net Nebraska adjustments to AGI.
If you’re a non-Nebraska resident, you must file income tax if you’ve had income from or connected with Nebraska resources.
Paying Taxes on Time in Nebraska
The current Nebraska tax filing deadline is May 17. Missed or late tax payment penalties can take different forms. The most common ones are:
- Late filing: 5% per month (25% maximum) of the unpaid tax at the due date or extended deadline.
- Late payment: 5% of the unpaid tax at the due date or extended deadline.
- Partial payment: 5% of the unpaid tax at the due date or extended deadline.
For more information on Nebraska state income tax filing requirements and processes, visit the official Nebraska government website.
You can request a payment extension if you’re able to show that your payment would cause ‘undue hardship’. If you qualify, you get an extra six months to pay the tax due on your return. If the IRS determines a ‘deficiency’ in your situation, the tax extension can be up to 18 months. Note, however, that your unpaid taxes will still accrue interest until you’ve made the payment.
Your Nebraska State Tax Refund Status
To check your state tax refund status, you can visit the official Nebraska Department of Revenue website. You can also call 1-800-742-7474 (toll-free) or 1-402-471-5729 and select Option 1 when prompted. This line is open 24/7.
When using the official revenue website to check your Nebraska state refund status, you are required to submit your social security number (SSN) and the exact amount of your anticipated refund.
Many reasons exist for undeliverable refunds. If you didn’t receive your state refund because you’ve moved or have changed names or if the address you initially provided was incomplete or illegible, you can send a letter to the following address:
Nebraska Department of Revenue
Revenue Operations Division
P.O. Box 98903
Lincoln, NE 68509-8903
In the letter, include your full name, correct mailing address, SSN, filing status (single, married, filing jointly), and the exact amount of your expected refund. This information will help the department verify your Nebraska income tax refund status.
Nebraska’s state taxes are generally higher than many other states. As such, taxpayers are also entitled to relatively higher refunds on their taxes. To properly calculate and determine your exact tax refund, you must understand how income tax rates are applied, depending on your tax bracket. You should also know your eligibility for various tax deductions and credits to lower your overall income tax. If you’re familiar with these, checking your Nebraska state income tax refund status can be as easy as going online and submitting a few pieces of information—provided you’ve paid taxes on time.
You can check the status of your state tax refund in Nebraska by calling 1-800-742-7474 (toll-free) or 1-402-471-5729 and selecting Option 1 when prompted. You can also visit the official website of the Nebraska Department of Revenue. Provide your social security number and the exact amount of the expected refund.
If your income tax return is filed by the due date, your refund will typically be delivered by July 15th. If using electronic filing, allow at least 30 days to receive the refund. If using paper returns, you should wait for at least three months, if the filing is error-free.
The IRS issues refunds each business day, Monday to Friday, except during holidays. Under the old system, they issued refunds only once per week. At present, they process tax returns as they receive them. They generally process electronic returns and refunds within 7 to 10 business days of receipt.
Nebraska charges taxpayers according to four tax rate brackets: 2.46%, 3.51%, 5.01%, and 6.84%. The current sales and use tax rates are similar at 5.5%. Keep in mind that these rates play a role in your overall Nebraska state taxes refund.