Nebraska Tax Brackets: 2025-2026 Rates and Phase-Down Through 2027

Nebraska’s tax brackets for the 2025 tax year run from 2.46% on the lowest slice of taxable income up to 5.20% at the top, spread across four brackets. For 2026, the top rate drops to 4.55%, and under the schedule in Neb. Rev. Stat. § 77-2715.03 the top rate falls again to 3.99% in 2027.¹

2025 Rates for Returns Due April 2026

If you’re filing a Nebraska return in early 2026, you’re using 2025 tax year rates:

Bracket 1: 2.46%
Bracket 2: 3.51%
Bracket 3: 5.01%
Bracket 4: 5.20%

The 2025 Nebraska Individual Income Tax Booklet includes a tax table covering taxable income up to $77,760. Above that figure, single filers owe $3,566 plus 5.20% of the excess, married couples filing jointly owe $3,088 plus 5.20% of the excess, and head of household filers owe $3,276 plus 5.20% of the excess.² Returns for the 2025 tax year are due April 15, 2026.

2026 Rates

Four statutory brackets still exist for 2026, but the top two now share the same rate:

Bracket 1: 2.46%
Bracket 2: 3.51%
Bracket 3: 4.55%
Bracket 4: 4.55%

Because brackets 3 and 4 carry the same rate, only two real rate jumps affect a 2026 taxpayer: from 2.46% to 3.51%, and from 3.51% to 4.55%. The statute sets base dollar thresholds for each filing status before inflation adjustments. Single filers: $0–$2,999, $3,000–$17,999, $18,000–$28,999, and $29,000 and above. Married couples filing jointly: $0–$5,999, $6,000–$35,999, $36,000–$57,999, and $58,000 and above. Head of household filers: $0–$5,599, $5,600–$28,799, $28,800–$42,999, and $43,000 and above.¹

The Tax Commissioner adjusts those dollar amounts every year for inflation, using the percentage change in the Consumer Price Index for All Urban Consumers from August 2016 through August of the year before the tax year. Final inflation-adjusted figures appear in the annual Nebraska Individual Income Tax Booklet when it is released, and they will be noticeably higher than the base amounts above.¹

The Phase-Down Through 2027

LB 754, passed in 2023, set a multi-year reduction for the top two bracket rates. The first two rates (2.46% and 3.51%) hold steady throughout. The top two rates have moved like this:

2024: Bracket 3 at 5.01%, Bracket 4 at 5.84%
2025: Bracket 3 at 5.01%, Bracket 4 at 5.20%
2026: Bracket 3 at 4.55%, Bracket 4 at 4.55%
2027 and after: Bracket 3 at 3.99%, Bracket 4 at 3.99%

By 2027, Nebraska’s top marginal rate will have fallen from 6.84%, where it sat before 2023, to 3.99%.¹

How The Brackets Apply To Your Income

Each rate applies only to the income that falls inside its bracket, not to your total earnings. A single filer with $50,000 of Nebraska taxable income in 2026 pays 2.46% on the first chunk, 3.51% on the next, and 4.55% on whatever lands in the third bracket and above. The effective rate ends up well below 4.55%.

Nebraska taxable income is not the same as gross pay. The calculation starts with your federal adjusted gross income, then adds or subtracts Nebraska-specific adjustments under Neb. Rev. Stat. § 77-2716. A common addition is interest from bonds issued by other states; a common subtraction is interest from U.S. government bonds.³ You then subtract your Nebraska standard deduction or your Nebraska itemized deductions. The brackets apply to what’s left.

Standard Deduction and Personal Exemption Credit

Nebraska does not use the federal standard deduction. Under Neb. Rev. Stat. § 77-2716.01, the Nebraska standard deduction is the lesser of the federal amount or a Nebraska-specific cap that is adjusted for inflation each year.⁴ For the 2025 tax year, the published amounts are $8,600 for single filers, $17,200 for married couples filing jointly, and $12,600 for head of household. Higher amounts apply if you are 65 or older or blind. A single filer who is 65 or older receives $10,600, and a married couple where both spouses are 65 or older receives $20,500.²

Because Nebraska’s standard deduction is well below the federal one, some taxpayers who take the federal standard deduction come out ahead itemizing on their Nebraska return.

Nebraska also gives a personal exemption credit of $171 per exemption for the 2025 tax year, claimed on Form 1040N. You get one for yourself, one for a spouse on a joint return, and one for each qualifying dependent. The amount is adjusted for inflation annually.² A credit works differently from a deduction. The deduction reduces the income the brackets apply to; the credit comes off the tax itself. A family of four claiming $684 in exemption credits saves exactly $684 regardless of bracket.

Income Nebraska Does Not Tax

Social Security benefits are fully excluded from Nebraska taxable income for tax years beginning on or after January 1, 2025. LB 873 created a phased elimination that started at 40% in 2022 and reached 100% in 2025.⁵ If you’re filing a 2025 return, no part of your Social Security income enters the Nebraska bracket calculation.

Military retirement benefits also receive a full exclusion for tax years beginning on or after January 1, 2022. The exclusion covers periodic payments attributable to uniformed service reported on an IRS Form 1099-R from the Department of Defense or the Office of Personnel Management.³ The earlier regime that required military retirees to make a one-time election between partial exclusion options no longer applies.⁶

1
Nebraska Legislature. Nebraska Code 77-2715.03 – Individual Income Tax Brackets and Rates; Tax Commissioner; Duties; Tax Tables; Other Taxes; Tax Rate
2
Nebraska Department of Revenue. Nebraska Individual Income Tax and Amended Return Booklet
3
Nebraska Legislature. Nebraska Code 77-2716 – Income Tax; Adjustments
4
Nebraska Legislature. Nebraska Code 77-2716.01 – Personal Exemptions; Standard Deduction; Computation
5
Nebraska Department of Revenue. 2022 Nebraska Legislative Changes
6
Nebraska Department of Revenue. Nebraska Income Tax for U.S. Servicemembers, Their Spouses, and Civilians Working With U.S. Forces Information Guide