Nebraska Salary Paycheck Calculator

Nebraska Taxes: What You Need to Know 

Understanding the key components of Nebraska’s tax structures gives you a comprehensive overview of your paycheck. Let’s discuss them below. 

Federal, State, and Local Tax Withholding 

Nebraska employs a multi-tiered tax system: 

• Federal Taxes: These are consistent nationwide based on progressive tax brackets. 

• Nebraska State Income Tax: The state uses a graduated rate system, ranging from 2.26% to 6.84% for tax year 2024. 

• Local Taxes: While less common in Nebraska than in some other states, some municipalities may impose additional taxes. 

FICA and State Insurance Taxes 

• Social Security Tax: Employees pay 6.2% on the first $168,600 of wages (for 2024). 

• Medicare Tax: A flat rate of 1.45% is applied to all wages, with an additional 0.9% on income over $200,000. 

• State Unemployment Insurance: While employees don’t directly pay this, employers contribute to the state unemployment fund. 

Pre-Tax Deductions 

Nebraskans can often reduce their taxable income through various pre-tax deductions: 

• 401(k) or 403(b) retirement plan contributions. 

• Health insurance premiums 

• Flexible Spendings Accounts (FSAs) for healthcare or dependent care 

• Health Savings Accounts (HSAs) for those with high-deductible health plans 

These deductions lower your taxable income, potentially reducing your overall tax burden. 

Key Nebraska Tax Information for 2024:

• Tax Forms and Deadlines: 

Form W-3 N (Nebraska Reconciliation of Income Tax Withheld) is due by January 31, 2024. 

E-file requirement for employers with over 50 forms to report 

The new Nebraska Form W-4 N is required for every Federal Form W-4 completed on or after January 1, 2020. 

• Special Considerations: 

Military spouse exemption available with Form 9N 

Annual renewal is required for employees claiming tax-exempt status (by February 15 each year) 

Special 1.5% withholding rate for certain circumstances 

• Nonresident Employees: 

Form 9N allows nonresident employees working in multiple states to designate the percentage of wages subject to Nebraska withholding. 

Employers must review payroll systems for employees working across state lines. 

• Taxable Wages: 

All amounts subject to federal income tax withholding also subject to Nebraska withholding if the wages were for services performed in Nebraska 

Certain gambling winnings and pension/annuity payments may be subject to withholding. 

• Employer Responsibilities: 

Must complete Nebraska Tax Application (Form 20) for income tax withholding certificate. 

Can file deposits and returns for multiple locations under one certificate 

Required to withhold as if an employee is single with no allowances and a post-2020 Federal W-4 is on file, but no Nebraska W-4 has been submitted. 

It’s advisable to consult with a tax professional or use our Nebraska Paycheck Calculator for a more accurate estimate of your take-home pay. 

Median household income in Nebraska 

Nebraska’s household incomes reveal a strong economic foundation, albeit slightly below the national average. Let’s explore the income statistics for the Cornhusker State. 

 Notable Nebraska Income Statistics: 

• High-Income Households: 7.8% of Nebraska households earn over $200,000 annually. 

• Age-Based Income Distribution: 

Under 25 years: $40,505 

25 to 44 years: $81,256 

45 to 64 years: $88,209 

65 years and over: $52,616 

• Wealthiest ZIP Code: 68069 (Population – 3,237) 

Average Household Income: $224,893 

Median Household Income: $108,394 

While Nebraska’s overall income figures are slightly below the national average, the state boasts several high-income areas and a significant portion of wealthy households.

Nebraska Tax Brackets 2024

Nebraska’s individual income tax system is progressive, with tax rates that vary according to income levels. These brackets are adjusted periodically to account for inflation and legislative changes, ensuring that residents are taxed fairly based on their income. Starting in 2024, Nebraska has introduced gradual tax rate reductions to ease the burden on taxpayers. Below is an updated breakdown of the tax brackets and rates for individuals, families, and estates in Nebraska for 2024. 

Nebraska Income Tax Brackets and Rates for 2024

Key Changes and Reductions

The most significant change for 2024 is a reduction in the top tax rate. Previously set at 6.84%, it has been lowered to 6.64% for income over $29,000 (or the respective thresholds for different filing statuses). This reduction is part of a broader plan to reduce the top income tax rate to 5.84% in 2025 and 4.55% by 2026, offering substantial relief to Nebraska’s higher-income earners. Here’s a detailed timeline for future adjustments: 

• 2024: Top rate reduced to 5.84% 

• 2025: To rate further drops to 5.20% 

• 2026: Highest rate decreases to 4.55% 

• 2027:  Final reduction to 3.99% 

These reductions are part of a multi-year legislative effort aimed at making Nebraska more tax-competitive. By gradually lowering the rates, the state hopes to attract more businesses and reduce the financial burden on individual taxpayers. 

Inflation Adjustments and Additional Provisions 

Nebraska’s income tax brackets are also subject to inflation adjustments, ensuring the brackets keep pace with rising living costs. Each year, the Tax Commissioner recalculates the income ranges for each tax bracket, adjusting them based on the Consumer Price Index for All Urban Consumers (CPI-U).  

Additionally, tax rates on other federal taxes factored into Nebraska’s income tax computations are set at 29.6%. This applies to taxable years beginning on or after January 1, 2013. 

Estate and Trust Taxation

Nebraska also imposes taxes on estates and trusts, with the first bracket for estates starting at $0 – $499 and taxed at 2.46%. As with individual taxpayers, estate and trust tax brackets are also subjected to gradual reductions in line with individual income tax rates over the next few years. 

As we’ve explored Nebraska’s complex tax landscape and income statistics, it’s clear that calculating your take-home pay can be quite challenging. That’s where our Nebraska Paycheck Calculator comes in handy. 

By inputting your salary information, pay frequency, and specific deductions, you’ll get an accurate estimate of your net pay. It also stays up to date with the latest tax regulations, ensuring you always have the most accurate information at your fingertips. 

Ready to calculate your Nebraska paycheck? Give our calculator a try and take the guesswork out of your finances!