4 tax brackets from 2.46% to 5.84% (LB754 2022 reform reduced from 6.84%)
Nebraska has a progressive income tax ranging from 2.46-5.84% across 4 brackets (reformed from 6.84% top rate in 2022 via LB754). At $100,000 income, Nebraska residents pay $4,610 state tax (4.61% effective rate) plus $12,908 federal tax. The top 5.84% rate applies to income over $35,730. Nebraska's ag-dominated economy (25% of state GDP) and Warren Buffett's Berkshire Hathaway headquarters in Omaha give the state unique economic stability despite moderate taxes.
Nebraska has a progressive income tax ranging from 2.46-5.84% across 4 brackets, applying increasing rates as income rises. This makes Nebraska's tax burden moderate among Midwest states. At $100K income, you pay $4,610 state tax (4.61% effective rate) - higher than South Dakota (0%), Iowa (4.4%), Kansas ($4,160), but lower than Minnesota ($5,672), Wisconsin ($5,270), and California ($5,762).
Major 2022 tax reform - LB754 cuts top rate from 6.84%: Nebraska passed Legislative Bill 754 in 2022, cutting the top income tax rate from 6.84% to 5.84% effective 2023. The reform consolidated 4 brackets (previously 4 brackets at 2.46-6.84%), keeping the same structure but reducing the top rate by 1 percentage point to compete with neighboring states. Governor Pillen's 2024 proposal (LB34) aimed to further cut to 3.99% flat tax by 2027, but it stalled in the legislature due to budget concerns (education groups warned $2B revenue loss). As of 2026, the rate remains 2.46-5.84% with no further cuts planned.
How it compares regionally:
The tradeoff - ag economy stability vs moderate taxes: Nebraska's 2.46-5.84% income tax generates $2.4B annual revenue (2026 projection), funding K-12 education ($2.2B - 35% of budget) and Medicaid expansion ($1.8B). Nebraska's economy is agriculture-dominated (25% of state GDP: corn $8.5B, beef $7.2B, soybeans $6B), which provides recession-resistant stability but limits wage growth (median household income $66K vs $75K national). Warren Buffett's Berkshire Hathaway (Omaha HQ, $900B market cap) and Union Pacific Railroad (Omaha HQ, $145B market cap) contribute significant corporate tax revenue, allowing Nebraska to maintain moderate income tax rates without severe budget cuts. NE ranks 18th in K-12 education spending, 22nd in healthcare quality, 15th in infrastructure - solid middle-tier outcomes.
Source: Nebraska Department of Revenue - Individual Income Tax
| Taxable Income | Tax Rate |
|---|---|
| $0 - $3,700 | 2.46% |
| $3,700 - $22,170 | 3.51% |
| $22,170 - $35,730 | 5.01% |
| Over $35,730 | 5.84% |
Note: These are marginal rates - you only pay the higher rate on income within each bracket.
Source: Nebraska Department of Revenue
Here's what Nebraska residents actually pay at different income levels (2026, single filer, standard deduction):
| Annual Income | Federal Tax | State Tax | Total Tax | Take-Home Pay | Effective Rate |
|---|---|---|---|---|---|
| $50,000 | $4,166 | $2,092 | $6,258 | $43,742 | 12.5% |
| $75,000 | $8,340 | $3,351 | $11,691 | $63,309 | 15.6% |
| $100,000 | $12,908 | $4,610 | $17,518 | $82,482 | 17.5% |
| $150,000 | $25,218 | $7,530 | $32,748 | $117,252 | 21.8% |
| $250,000 | $54,094 | $13,370 | $67,464 | $182,536 | 27.0% |
Note: Includes federal and state income tax only. Does not include FICA (Social Security/Medicare), which adds 7.65% for employees.
Key takeaway: At $100K, Nebraska takes $4,610 in state tax alone.
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Planning a move to or from Nebraska? Multi-state filing is complex. Get matched with a CPA who handles Nebraska taxes and multi-state returns. Virtual meetings, fixed pricing.
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Get Matched With a CPA →Migration Trends: According to U.S. Census Bureau data (2021-2022), Nebraska experienced net outmigration of 4,280 residents (brain drain to higher-wage states). Top origin states were:
Outflow: Nebraska lost residents to:
Why people move to Nebraska: Affordable housing (Omaha $260K, Lincoln $275K vs Denver $650K, Kansas City $340K), low unemployment (2.3% - one of lowest nationally), agriculture jobs ($45-70K farm operations, $80-100K ag tech/John Deere), Berkshire Hathaway/insurance jobs (Mutual of Omaha pays $65-95K underwriters), Union Pacific railroad jobs ($70-90K operations), friendly Midwest culture, safe cities (Omaha ranks 30th-safest among 100 largest US cities), excellent public schools (Omaha Westside, Lincoln East rank top 5% nationally).
Why people leave Nebraska: Lower salaries (NE median $66K vs CO $80K, TX $70K, MN $77K), brain drain (U of Nebraska grads leave for Chicago/Minneapolis/Denver higher-wage tech/finance jobs paying 30-50% more), limited urban amenities (Omaha 967K metro feels small vs 3M+ metros), harsh winters (-5°F January lows, windchill -20°F), rural depopulation (western NE counties losing population, young people flee to Omaha/Lincoln or out-of-state), 5.84% income tax vs 0% in SD/WY/TX.
Tax considerations if moving here: NE residency = 183+ days in state OR domicile test. 2.46-5.84% progressive state tax on NE taxable income (federal AGI minus $8,100 standard deduction single 2026). Brackets: $0-3,700 at 2.46%, $3,700-22,170 at 3.51%, $22,170-35,730 at 5.01%, $35,730+ at 5.84%. No local income tax anywhere in NE (simple). Sales tax 5.5% state + 0-2% local (Omaha 7%, Lincoln 7.25%) = moderate. Property tax 1.54% average (HIGH - $4,004/year on $260K Omaha home, 2nd-highest nationally after NJ 2.23%). Social Security FULLY TAXED at NE rates (unfriendly to retirees vs neighboring states exempt SS). Retirement income (pensions/401k/IRA) FULLY TAXED (no exemptions unlike Iowa/Kansas). High property tax + SS/pension taxation = Nebraska ranks 38th for retiree tax-friendliness (avoid if retired).
| State | Tax Rate | Tax on $100K Income | Difference from Nebraska |
|---|---|---|---|
| Nebraska | 2.46-5.84% | $4,610 | Baseline |
| South Dakota | 0% | $0 | -$4,610 (less tax) |
| Iowa | 4.4% flat | $4,400 | -$210 (less tax) |
| Kansas | 3.1-5.7% | $4,160 | -$450 (less tax) |
| Missouri | 2-4.95% | $4,200 | -$410 (less tax) |
Key insight: Nebraska's 2.46-5.84% progressive tax is slightly higher than most neighbors. At $100K income, NE is $210-450 more expensive than IA/KS/MO and $4,610 more expensive than SD (0%). However, Nebraska's economic stability (ag-based recession resistance, Berkshire Hathaway/Union Pacific corporate presence) and excellent public schools (Omaha/Lincoln rank top 5% nationally) justify the moderate tax premium for families.
Total tax burden at $100K + median home: Nebraska (Omaha): $4,610 income + $4,004 property (1.54% × $260K) + $3,500 sales (7%) = $12,114 total (12.1%). South Dakota (Sioux Falls): $0 income + $3,150 property (1.2% × $262K) + $4,500 sales (6.5%) = $7,650 (7.7%). Iowa (Des Moines): $4,400 income + $3,348 property (1.35% × $248K) + $3,500 sales (7%) = $11,248 (11.2%). Result: Nebraska's total burden (12.1%) is HIGHEST regionally due to 1.54% property tax (2nd-highest nationally). SD wins on total tax (7.7%), but Omaha offers better schools/jobs.
The South Dakota question - Omaha vs Sioux Falls: At $100K: SD saves $4,610 income tax + $854 property tax = $5,464/year savings. BUT Omaha median household income $73K vs Sioux Falls $67K (9% higher wages in Omaha), and Omaha has Berkshire Hathaway/Mutual of Omaha/Union Pacific professional jobs paying $80-120K vs Sioux Falls lacking Fortune 500 headquarters. For professionals $150K+: SD saves $7,530 income tax (worth it). For middle-income families $75-100K: Omaha wins due to better schools (Westside ranks #38 nationally vs no SD schools in top 100), higher wages (9%), and more jobs.
Nebraska's 1.54% average property tax (2nd only to NJ 2.23%) results from heavy reliance on property tax to fund K-12 education due to Nebraska's small population (1.96M - 37th-largest state) and agricultural tax exemptions. NE constitution Article VIII exempts $100K of ag land value + livestock/equipment from property tax, shifting burden to homeowners. At $260K Omaha home: $4,004/year property tax. Legislature's LR264CA (2023) proposed constitutional amendment to cap residential property tax at 1%, but voters rejected it 58-42% (education groups warned funding crisis). High property tax + SS/pension taxation = Nebraska ranks 38th for retiree tax-friendliness. Avoid NE if retired; consider if working professional valuing jobs/schools.
Yes, Nebraska FULLY TAXES Social Security, pensions, 401k, and IRA distributions at standard 2.46-5.84% rates - one of worst states for retirees. NO EXEMPTIONS at any age (unlike Iowa exempts SS, Kansas exempts SS for AGI <$75K, Missouri exempts SS for 62+). Example: Age 68 with $25K SS + $50K pension = $75K total. All $75K taxed at NE rates (after $8,100 standard deduction) = $3,510 NE tax (4.68% effective). Combined with HIGH property tax (1.54% = $4,004 on $260K home), retirees face $7,514 annual state/local tax burden at modest $75K retirement income. Kiplinger ranks Nebraska 38th for retiree tax-friendliness. Retirees should consider Iowa (SS exempt, 4.4% flat), Kansas (SS exempt if AGI <$75K), or SD/WY (0% income tax).
Unlikely in near-term. Governor Jim Pillen's 2024 Legislative Bill 34 proposed cutting from 2.46-5.84% progressive to 3.99% flat by 2027, estimated to save $2B over 10 years for taxpayers. Bill STALLED in legislature due to: (1) Education funding concerns - Nebraska Teachers Union warned $2B revenue loss would force school cuts, (2) Property tax relief debate - rural senators demanded property tax cuts before income tax cuts, (3) Revenue volatility - ag commodity prices down 15% in 2024 (corn $4.50/bushel vs $6 in 2022), reducing state budget cushion. As of 2026, rate remains 2.46-5.84%. Political consensus: income tax cuts unlikely without property tax relief deal. Watch 2027 legislative session for renewed push.
Berkshire Hathaway (Omaha HQ since 1962, Warren Buffett CEO, $900B market cap) is Nebraska's largest corporate taxpayer and economic anchor. Berkshire owns 60+ businesses (Geico, BNSF Railway, Nebraska Furniture Mart, Dairy Queen, Duracell, Fruit of the Loom) employing 383K+ worldwide, including 15K+ in Omaha. Nebraska corporate tax revenue from Berkshire: estimated $80-100M/year (NE corporate rate 5.84% on NE-apportioned income). Economic impact: Berkshire's Omaha presence attracts financial/insurance companies (Mutual of Omaha, TD Ameritrade pre-merger, Union Pacific Railroad) creating 50K+ high-wage jobs ($80-120K). Buffett's philanthropy: donated $5B+ to Nebraska orgs (U of Nebraska, Buffett Cancer Center). Buffett opposes LB34 income tax cuts, arguing Nebraska needs education funding. Result: Berkshire's tax payments + job creation allow NE to maintain 5.84% top rate vs neighboring states cutting to 4-5%.
Nebraska offers excellent agriculture/ag-tech jobs but salaries lag coastal/urban states. Ag jobs: Farm operations manager $50-70K (lower than expected), precision ag/John Deere technician $65-85K (competitive), ag commodities trader/analyst $80-100K (moderate). Compare to income tax: At $70K ag job, NE tax $3,190 (4.56%) vs IA $3,080 (4.4%) vs SD $0. Analysis: For farm operations $50-70K, Nebraska works (affordable $260K Omaha housing, low unemployment 2.3%, stable ag economy). For ag-tech professionals $80-100K, Nebraska competitive (access to John Deere R&D, ConAgra HQ, Lindsay Corp irrigation tech). For high earners $150K+, consider TX (0% tax, Houston ag trading) or CA (higher salaries offset 9.3% tax). Nebraska wins for: ag professionals valuing stability + affordable living + excellent schools (Omaha Westside). Loses to: TX/CA for high earners, IA/SD for lower taxes.
How we calculate: Nebraska uses a progressive tax system with 4 brackets (2.46%, 3.51%, 5.01%, 5.84%) applied to Nebraska taxable income (federal AGI minus $8,100 standard deduction for single filers in 2026). Our calculator applies the bracket rates to taxable income and adds federal income tax using official 2026 IRS brackets. Effective tax rates are calculated by dividing total tax by gross income. For comparison purposes, we show neighboring states' tax calculations at the same income levels using their official 2026 tax brackets and rates.
Data sources: Nebraska Department of Revenue: revenue.nebraska.gov - Official 2026 tax brackets (2.46-5.84%), standard deduction ($8,100 single), LB754 (2022) tax reform history, LB34 (2024) flat tax proposal. IRS: Federal tax brackets 2026. U.S. Census Bureau: Migration data (2021-2022), median household income ($66,000 NE). Zillow: Median homes (Omaha $260K, Lincoln $275K, January 2026). Nebraska Department of Agriculture: Ag economic impact ($25B - corn $8.5B, beef $7.2B, soybeans $6B). Berkshire Hathaway: 2024 Annual Report (market cap $900B, 383K employees).
Verification: Nebraska's 2.46-5.84% brackets verified against Nebraska Revised Statutes §77-2715 and NE Department of Revenue 2026 guidance (January 2026). LB754 (2022) tax reform (cut from 6.84% to 5.84%) verified against legislative text. LB34 (2024) flat tax proposal status verified against Nebraska Legislature records (stalled, no enactment). Federal brackets verified against IRS Revenue Procedure 2025-58. Migration data from IRS SOI via Census Bureau. Property/sales tax from NE Department of Revenue 2025 report. Housing data from Zillow (January 2026). Berkshire Hathaway data from 2024 SEC 10-K filing.
Limitations: Assumes single filer, W-2 income only, standard deduction, NE full-year residency. Does not include: county/city sales tax variations (Omaha 7%, Lincoln 7.25%, rural 5.5%), property tax variations by county (1.2-1.8% effective rates, Omaha 1.54% average), federal credits (EITC, child tax credit), part-year/nonresident calculations, retirement income (Social Security and pensions FULLY TAXED in NE - no exemptions unlike neighboring states), agricultural land exemptions ($100K ag land value exempt). Consult licensed NE CPA for: multi-state income, retirement income planning (NE unfriendly - ranks 38th for retirees), property tax appeals (1.54% high), business income (C-corps 5.84%, pass-throughs 2.46-5.84% individual rates).
These calculations are estimates for informational purposes only and reflect 2026 Nebraska tax law (2.46-5.84% progressive brackets, $8,100 standard deduction single). Tax situations vary based on filing status, deductions, credits, income types, and residency status. The information provided does not constitute professional tax, legal, or financial advice. Nebraska cut top rate from 6.84% to 5.84% in 2022 (LB754); further cuts to 3.99% flat proposed (LB34 2024) but stalled in legislature. Does not include county/city sales tax variations (Omaha 7%, Lincoln 7.25%), high property tax (1.54% average, 2nd-highest nationally), or retirement income taxation (Social Security and pensions FULLY TAXED - NE ranks 38th for retiree tax-friendliness). Federal tax laws change annually. Always verify current rates with Nebraska Department of Revenue and IRS, and consult a licensed tax professional for advice specific to your situation.
Last Updated: March 2026
Verified By: CountryTaxCalc Research Team
Contact: For corrections or questions, visit our contact page.
Last Updated: March 2026