Individual Income Tax FAQs
This guidance document is advisory in nature but is binding on the Nebraska Department of Revenue (DOR) until amended. A guidance document does not include internal procedural documents that only affect the internal operations of DOR and does not impose additional requirements or penalties on regulated parties or include confidential information or rules and regulations made in accordance with the Administrative Procedure Act. If you believe that this guidance document imposes additional requirements or penalties on regulated parties, you may request a review of the document.
This guidance document may change with updated information or added examples. DOR recommends you do not print this document. Instead, sign up for the subscription service at revenue.nebraska.gov to get updates on your topics of interest.
ADDED 04/06/2021: The American Rescue Plan Act of 2021 provides that up to $10,200 of unemployment benefits received in 2020 will not be taxable federally. Will Nebraska follow the federal treatment of these benefits?
Yes. A Nebraska individual income tax return begins with the taxpayer’s adjusted gross income reported on the federal return. Nebraska taxpayers will take the exclusion on their federal return as part of calculating their adjusted gross income. Nebraska is a state with rolling conformity and follows federal changes to the adjusted gross income, unless the Nebraska Legislature enacts legislation indicating otherwise.
ADDED 04/06/2021: How can I claim the unemployment benefits exclusion if I have already filed my Nebraska return?
At this time, DOR requests that taxpayers do not file amended Nebraska individual income tax returns until DOR determines the appropriate processes for correcting these returns in every situation. DOR is working with the IRS to gather more information. Further guidance will be issued as soon as possible.
What is the penalty for filing my tax return late or without payment?
Late filed return -- 5% per month (25% maximum) of the unpaid tax at the due date or extended filing date (extension of time).
Late payment -- 5% of unpaid tax at the due date or extended filing date.
Partial payment -- 5% of unpaid tax at the due date or extended filing date.
What if I've made an error on my tax return and need to correct it?
How do I get a copy of my Form W-2?
If you have not received a Form W-2 from an employer by January 31, call or write to your employer requesting the form, giving them your current mailing address. Nebraska will accept a photocopy of your W-2 if the original is lost. If this is unsuccessful, call the IRS at 1-800-829-1040 to obtain a substitute Form W-2. Nebraska will accept a copy of the substitute W-2 filed with the IRS. A state amount withheld and "NE" should be written on the form prior to mailing it to the Department of Revenue.
Does Nebraska have a deduction for the qualified state tuition program under section 529 of the Internal Revenue Code?
Yes. Nebraska has the Nebraska College Savings Program deduction. The account owner deducts from federal adjusted gross income the annual contributions he or she makes to the Nebraska College Savings Program.
The college savings plans are qualified tuition programs under Section 529 of the Internal Revenue Code, which governs all state programs. There are four plans within the Nebraska Educational Savings Plan Trust – NEST Direct College Savings Plan, NEST Advisor College Savings Plan, the TD Ameritrade 529 College Savings Plan, and the State Farm College Savings Plan. The Nebraska State Treasurer serves as the Program Trustee. First National Bank of Omaha serves as the Program Manager, and all investments are approved by the Nebraska Investment Council.
Effective January 1, 2014, the maximum state deduction is $10,000 for single, head of household, and married, filing jointly filers; and $5,000 for married, filing separately filers. Account owners and parents/guardians who are custodians of an UGMA or UTMA NEST Direct account are eligible for the applicable deduction. For more detailed information about the Nebraska College Savings Program, visit the State Treasurer's website.
Can contributions to any Internal Revenue Code section 529 educational student aid program qualify for deduction under the Nebraska College Savings Plan?
No. Only contributions made to the Nebraska College Savings Program, administered by the Nebraska State Treasurer, qualify for the deduction. However, if another state’s plan is rolled over to the Nebraska College Savings Plan, the interest, earnings, and contributions received under an IRC § 529 qualified rollover are eligible for the deduction.
What happens if I roll over my Nebraska College Savings Plan account to another section 529 savings plan?
When a Nebraska College Savings Program 529 account, administered by First National Bank, is rolled over to another state’s section 529 savings plan, or to a section 529 plan not administered under the Nebraska College Savings Program, the Nebraska College Savings Program account is considered to be cancelled.
In this event, the account owner is required to recapture any Nebraska College Savings Program contributions previously deducted for the years the cancelled (rollover) account was in existence. The recapture is reported on Nebraska Schedule I of the Individual Income Tax Return, Form 1040N, for the tax year of the account rollover.
There are four plans within the Nebraska Educational Savings Plan Trust – NEST Direct College Savings Plan, NEST Advisor College Savings Plan, the TD Ameritrade 529 College Savings Plan, and the State Farm College Savings Plan.
Any 529 accounts outside of these plans (which are offered by other banks in Nebraska; or by banks in another state; or which are administered by a state other than Nebraska) will not qualify for the Nebraska income tax deduction.
Nonresidents, Partial-year Residents, or Income from Another State
Part of my income is from Nebraska, and part is from another state. How do I show this on my return?
I'm a full-year Nebraska resident, but my income is from another state. Do I have to file a Nebraska Individual Income Tax Return?
Yes. You must file a Form 1040N.
For regular income, you will receive credit for any taxes paid to the other state by completing a Nebraska Schedule I and attaching a copy of the other state's income tax return. Nebraska income tax is imposed on all income which is earned while a resident of this state.
You may reduce your federal adjusted gross income on the Nebraska Schedule I for pass-through income received from an S corporation or LLC in a state other than Nebraska.
I won some money at a casino in another state, and was issued a Form W-2G. What do I do about these winnings?
These winnings are part of your federal adjusted gross income and need to be included on your Nebraska return. You may also need to complete an income tax return for the other state to report these winnings to that state.
After filing an individual income tax return with the other state, you will receive a credit for any taxes properly paid to the other state by completing a Nebraska Schedule I and attaching it to your Form 1040N, along with a copy of the other state's return.