Taxes in Nebraska
Updated:
By: Lauren Hamer
Editor
Edited By: Jeff Smith
Sr. Content Manager
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Despite having a lower cost of living comparatively, Nebraska property taxes are among the highest in the nation. In 2023, the state introduced a new tax reform framework to better compete with other states. Below, we explain various Nebraska state taxes affecting retirement income, such as sales tax, inheritance tax, and property taxes.
For information regarding taxes in other states, see Retirement Taxes by State.
Nebraska Tax Rates
| State Sales Tax | 5.50% |
| Avg State/Local Sales Tax | 6.94% |
| Gas Tax | $0.25 per gallon |
| Diesel Tax | $0.25 per gallon |
| Cigarette Tax | $0.64 per pack |
| Income Tax | 6.64% |
| Effective Tax Rate | 6.17% |
| Property Tax | 1.73% |
| Social Security Tax | Partial |
| Medical/Dental Deduction | None |
| Federal Income Tax Deduction | None |
| Retirement Tax | Partial |
Nebraska State Taxes Explained
Nebraska Sales Tax
5.5%. Localities can add as much as 2.5%. There is a sales tax and an annual tax on vehicles.
Nebraska Income Taxes
Top rate of 6.64% with additional reductions slated for 2024 and thereafter. This is down from 6.84% in 2022.
Nebraska Property Taxes
Nebraska’s effective property tax rate is 1.73%. The median home value is $155,800, which would incur a $2,689 tax.
Nebraska’s Homestead Exemption is available for those over age 65, veterans with disabilities and their spouses (conditions apply) and qualified disabled individuals. Download the latest Nebraska Homestead Information Guide for income requirements and other details.
Nebraska Retirement Taxes
Minnesota allows a 60% deduction of Social Security benefits included in federal adjusted gross income (AGI), up from 40% in 2022. All military retirees may exclude 100% of military retirement benefits from Nebraska taxable income. Federal amount less any state or local income taxes included in those deductions.
Nebraska Estate and Inheritance Taxes
Nebraska has no estate tax but is one of the few states with an inheritance tax of up to 15%, down from 18% in 2022.
Visit the Nebraska Department of Revenue website for tax guides, contact information, and the latest state tax news.