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Nebraska Property Tax Credit 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 the 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.
What is the property tax year?
The property tax year is the calendar year the property taxes were levied. Most taxpayers pay their property taxes in the year after the taxes were levied. Taxpayer’s that paid the property taxes levied in 2022 during the 2023 calendar year should enter 2022 for the property tax year in the Nebraska Property Tax Look-up Tool and on the 2023 Nebraska Property Tax Credit, Form PTC.
How do I claim the credits for school district and community college property taxes paid?
The credits for school district and community college property taxes paid may be claimed by completing a Nebraska Property Tax Credit, Form PTC, and submitting it with your Nebraska income tax return.
Use the Nebraska Property Tax Look-up Tool to calculate the amount of school district and community college property taxes paid. Enter the information provided by the Look-up Tool on Form PTC.
I filed my Nebraska individual income tax return without claiming the credits for school district and community college property taxes paid. How do I claim the credits?
The credits may be claimed for property taxes paid in 2023 by filing a 2023 Amended Nebraska Property Tax Credit, Form PTCX. To claim a credit for school district property taxes paid in a prior year, file the appropriate year PTCX form. Special rules apply to taxpayers that file fiscal year returns.
Which Nebraska Property Tax Credit, Form PTC should I file?
You must file the Form PTC for the same tax year as the income tax return on which the credit is claimed. For example, a 2023 Form PTC must be filed with your 2023 income tax return.
What property tax years qualify for the school district and community college property tax credits?
All school district property taxes paid after December 31, 2019 qualify for the credit. All community college property taxes paid after December 31, 2021 qualify for the credit.
What property taxes qualify for the credit?
Only school district and community college real property taxes qualify for the credit.
No other taxes levied qualify for the credit. Taxes paid that are not within this definition include, but are not limited to:
- School bonds.
- Overrides of the levy limits approved by the voters.
- Educational service units.
What if my property taxes were 5 years or more delinquent at time of payment?
Do property taxes levied by a Learning Community qualify for the credit?
Yes. The amount paid qualifies for the credit as school district property taxes.
How do property tax credits affect the allowable school district and community college property taxes on a parcel?
The school district and community college property taxes levied must be reduced by a portion of the homestead exemption and the credits. The Nebraska School District Property Tax Look-up Tool will perform the calculation automatically.
I sent a property tax payment to the county treasurer on or within a few days of December 31, 2023. In what year were those taxes paid?
The property taxes were paid to the county treasurer in 2023 when made:
- In-person on or before January 2, 2024;
- Via United States mail postmarked on or before January 2, 2024; or
- Online and processed on or before January 3, 2024.
The property taxes were paid to the county treasurer in 2024 when made after the dates listed above. The year the above property taxes were paid is in accordance with Neb. Rev. Stat. § 49-1203.
I sent a property tax payment to the county treasurer on or within a few days of December 31, 2022. In what year were those taxes paid?
The property taxes were paid to the county treasurer in 2022 when made:
- In-person on or before January 3, 2023;
- Via United States mail postmarked on or before January 3, 2023; or
- Online and processed on or before January 4, 2023.
The property taxes were paid to the county treasurer in 2023 when made after the dates listed above. The year the above property taxes were paid is in accordance with Neb. Rev. Stat. § 49-1203.
I sent a property tax payment to the county treasurer on or within a few days of December 31, 2021. In what year were those taxes paid?
The property taxes were paid to the county treasurer in 2021 when made:
- In-person on or before January 3, 2022;
- Via United States mail postmarked on or before January 3, 2022; or
- Online and processed on or before January 4, 2022.
The property taxes were paid to the county treasurer in 2022 when made after the dates listed above. The year the above property taxes were paid is in accordance with Neb. Rev. Stat. § 49-1203.
Should the school district and community college property tax credits be included in Nebraska taxable income?
The school district and community college property tax credits will be included in Nebraska taxable income if it is included in federal adjusted gross income or federal taxable income. Please contact the IRS about the taxation of this credit.
If there is more than one owner listed on the property tax statement, who gets the credit?
Only the person or entity that paid the property tax to the county treasurer may receive the credit.
Who gets the credit when a parcel is sold during the year?
The taxpayer that paid the property tax on the parcel may claim the credit. The property tax is paid when received by the county treasurer. Enter the amount of property taxes you paid in the Look-up Tool to calculate the school district property taxes you paid. Parcel sales in Douglas and Sarpy counties may be treated differently. If the property was bought or sold in Douglas and/or Sarpy county, please see example 2.
Example 1: A parcel is sold on May 1, 2023. The seller paid the following property taxes:
- $1,203 of the 2022 property tax was paid to the county treasurer on April 1, 2023;
- $1,203 of the 2022 property tax was funded at closing and paid to the county treasurer in 2023; and
- $798 of the 2023 property taxes was funded at closing (January 1, 2023 – May 1, 2023) and paid to the county treasurer in 2024.
The buyer paid $1,605 of 2023 property tax to the county treasurer in 2024.
The seller paid all the 2022 property taxes in 2023. The seller may claim a credit for the 2022 school district and community college property taxes on the 2023 income tax return (enter $2,406 in the Look-up Tool). The seller paid part of the 2023 property taxes in 2024. The seller may claim a credit for the related school district and community college property taxes on the 2024 income tax return in proportion to the amount of the property tax funded for 2023 at closing (enter $798 in the Look-up Tool).
The buyer did not pay any 2022 property tax. The buyer cannot claim a credit for any 2022 school district or community college property taxes. The buyer paid part of the 2023 property taxes, but they were not paid to the county treasurer until 2024. The buyer may claim a credit for the related school district and community college property taxes on the 2024 income tax return (enter $1,605 in the Look-up Tool).
Example 2: An individual sold a parcel located in Douglas County on October 9, 2023. The Douglas County Treasurer’s records show that the 2022 property tax was paid in two installments ($4,738.57 on 4/1/ 2023 and $4,738.57 on 7/1/2023). The seller paid all the 2022 school district and community college property taxes to the Douglas County Treasurer (enter $9,477 in the Look-up Tool). The seller may claim the credit on the 2022 school district and community college property taxes paid on the 2023 income tax return, because the tax was paid to the Douglas County Treasurer.
At closing, the buyer reimbursed the seller $2,175.08 of the 2022 property tax the seller already paid to the county. The buyer cannot claim the credit for any of the 2022 school district property tax, because the tax had already been paid to the Douglas County Treasurer prior to closing. The reimbursement shown on the closing statement does not change who can claim the credit when the tax is remitted to the county treasurer prior to the closing.
Who gets the credit on a leased parcel?
The person or entity that paid the property tax to the county treasurer may claim the credit. If the lessee paid the county treasurer, the lessee may claim the credit. If the lessor paid the county treasurer, the lessor may claim the credit.
Can a pass-through entity claim the school district and community college property tax credits?
Yes. A pass-through entity may claim a credit for the school district property tax it paid for tax years beginning on and after January 1, 2021 and a credit for community college property taxes it paid for tax years beginning on and after January 1, 2022. The owners of the pass-through entity cannot claim the credits for any property taxes paid by the pass-through entity on or after January 1, 2021.
The credit for the entity includes:
- The credit computed on the school district and community college property taxes paid during the year covered by the return; and
- For the 2021 tax year only, the credit computed on the school district property tax paid in 2020 if the pass-through entity did not allocate the school district property tax paid to its owners.
Different rules may apply to fiscal year and short-year returns.
Can a nonresident individual claim the school district and community college property tax credits?
Yes. The nonresident individual must file a Nebraska Individual Income Tax Return, Form 1040N, and Form PTC. Both forms are required even if the nonresident individual would otherwise not have a Nebraska filing requirement.
What school district and community college property tax payments may a fiscal-year filer include on its Form PTC?
A fiscal year taxpayer will complete the Form PTC for the school district and community college property taxes paid during the calendar year in which its fiscal year begins.
Example: A taxpayer’s fiscal year begins April 1, 2023 and ends March 31, 2024. The taxpayer paid all $10,550 of the 2022 property tax in two installments. The county treasurer received the first payment on March 27, 2023 and the second payment on July 28, 2023. The taxpayer may claim a credit for the related school district and community college property taxes paid in the 2023 calendar year on its 2023 income tax return (enter $10,550 in the Look-up Tool).
A parcel is owned by a disregarded LLC that paid the property tax. Who is required to complete a Form PTC?
The owner of the LLC will complete Part A and Part B of Form PTC. The LLC is not required to file a Nebraska income tax return or complete Form PTC.
How does a tax-exempt organization claim the school district and community college property tax credits?
Tax-exempt corporations must file a Nebraska Corporation Income Tax Return, Form 1120N, and Form PTC. Tax-exempt trusts must file a Nebraska Fiduciary Income Tax Return, Form 1041N, and Form PTC.
Can a C-corporation, S-corporation, trust, partnership, or financial institution file an Amended Nebraska Property Tax Credit, Form PTCX?
Following a divorce that is finalized before the end of the tax year, who may properly claim the credit?
The individual that paid the property tax to the county treasurer from a separate bank account may properly claim the credit. If payment was made from a joint bank or escrow account, then the credit may be split between the individuals based on:
- A divorce decree;
- An agreement between the individuals;
- An even division; or
- Any other method that fairly represents each individual’s contribution to the payment.
If excess credits are claimed, both individuals may be required to provide information to DOR supporting the credit they claimed.
Does TIF have any effect on the amount of credit?
No, the school district property and community college taxes used for the redevelopment project are eligible for the credit. The Nebraska School District Property Tax Look-up Tool will automatically compute the school district and community college property taxes paid on parcels with TIF.
