Frequently Asked Questions about the Income Tax Changes Due to the COVID-19 National Emergency
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 03/22/2022: Are grants received from state or local governments from programs funded by the federal Coronavirus State and Local Fiscal Recovery Funds (SLFR Funds) of the American Rescue Plan Act of 2021 (ARPA) included in my Nebraska taxable income?
The federal tax code generally includes government grants in federal adjusted gross income (AGI) unless an exclusion applies. This IRS Fact Sheet indicates individuals may be able to exclude some SLFR grants or payments from federal AGI as qualified disaster relief payments.
Your Nebraska taxable income must include any SLFR grant or payment amount that is included in your federal AGI. For the taxation of these grants see the IRS Fact Sheet on the taxation of SLFR funds or contact the IRS.
UPDATED 07/27/2021: Do employers need to change income tax withholding for employees who were working onsite in one state before the COVID-19 pandemic, but who are now working from an alternate site in another state?
Through July 29, 2021, DOR will not require employers to change the state which was previously established in their payroll systems for income tax withholding purposes for employees who are telecommuting or temporarily relocated to a work location within or outside Nebraska due to the COVID-19 pandemic. A change in work location was not required beginning with the date the emergency was declared by Governor Pete Ricketts, March 13, 2020, and ending 30 days after the end of the emergency, which is July 30, 2021. Beginning on July 30, 2021, employers must review their payroll systems for income tax withholding purposes for employees working at a location that is in a different state to assure compliance with Nebraska requirements in 316 Neb. Admin. Code, Ch. 21 and Ch. 22, § 003.
The American Rescue Plan Act of 2021 (ARPA) provides up to $10,200 of unemployment benefits received in 2020 will not be taxable federally. How do I claim this benefit exclusion on my Nebraska return?
ADDED 2/17/2021: Are grants received under Nebraska’s stabilization programs included in taxable income?
Yes. The federal tax code generally includes grants received from government programs in gross income. Nebraska follows the federal tax code. Grants received from Nebraska’s stabilization programs are included in gross income under the federal tax code, and are therefore subject to Nebraska income tax.
Nebraska established the stabilization grant programs from federal funding received from the Coronavirus Relief Fund under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Nebraska's stabilization grant programs include, but are not limited to, the Small Business Stabilization Program and the Livestock Producer Stabilization Program.
ADDED 2/17/2021: Are forgiven Paycheck Protection Program (PPP) loans included in taxable income?
No. Under the federal Consolidated Appropriations Act, 2021, forgiven PPP loans are excluded from the federal gross income of the recipient under the federal tax code. Nebraska follows the federal tax code. As a result, forgiven PPP loans are not included in taxable income for Nebraska purposes.
ADDED 2/17/2021: May a business deduct expenses paid with proceeds from a loan forgiven under the PPP?
Yes. Expenses paid with forgiven PPP loans are allowable deductions under the federal Consolidated Appropriations Act, 2021.
Have the tax year 2019 income tax filing deadlines and payment due dates been postponed?
The postponement generally applies to all income tax returns that have a filing or payment deadline on or after April 1, 2020, and before July 15, 2020. Individuals, trusts, estates, corporations, and other non-corporate tax filers qualify for the extra filing time. This postponement includes taxpayers that file Nebraska Forms 1040N, 1041N, 1120N, 1120-SN, and 1065N. This also applies to taxpayers expecting a refund or having zero liability on their 2019 tax returns. If this changes, DOR will post the update here, and will send out a notice via our subscription service.
Have the tax year 2019 financial institutions filing deadlines and payment due dates been postponed?
The filing and payment deadlines for the Financial Institution Tax Return, Form 1120NF, are statutory and cannot be postponed. However, the Tax Commissioner has determined that any penalties and interest related to payments due between April 1, 2020 and before July 15, 2020 will be automatically waived.
I have not filed my 2019 income tax return that would have been due on April 15, 2020 yet, but I expect to file it by July 15, 2020. What do I need to do?
File and pay any taxes due with your return by July 15, 2020.
What if I can’t file my return by July 15, 2020?
You may file a Nebraska extension (Form 4868N – individuals; Form 7004N – estates, trusts, and corporations), on or before July 15, 2020, to have the filing date for the return extended to October 15, 2020 for individuals and estates and trusts; and to November 15, 2020 for corporations. Individuals and corporations granted a federal extension of time to file will automatically be granted a Nebraska extension for the same period (attach a copy of the federal extension). Estates and trusts granted a federal extension will automatically be granted a six-month Nebraska extension (attach a copy of the federal extension). To avoid interest and penalties, pay your taxes in full by July 15, 2020.
I already filed my 2019 income tax return and I owe taxes, but I have not paid yet. What do I need to do to avoid interest and penalties?
To avoid interest and penalties, pay your taxes in full by July 15, 2020. Interest and penalties will begin to be charged after July 15, 2020 for any amount remaining unpaid after that date.
I already filed my 2019 income tax return before April 15, 2020 and scheduled a payment for April 15, 2020. Will this payment be automatically rescheduled to July 15, 2020?
No. The payment will not be automatically rescheduled to July 15, 2020. If you do nothing, the payment will be made on the date you chose. If you need to change the scheduled payment date or cancel your payment you will follow the instructions noted below.
If you scheduled your payment through:
- E-pay (Using DOR’s website)
Log into your e-pay account to change their scheduled payment date or to cancel the payment.
- EFW (made with the return)
At least two business days prior to your scheduled payment, contact the DOR by phone at 800‑742‑7474 (NE and IA) or 402‑471‑5729 to cancel the payment. The scheduled payment date cannot be changed. DOR will need the primary taxpayer’s full Social Security number for individual income tax payments, or a Nebraska ID number for business income tax payments, and the payment amount.
- Credit Card
Contact ACI Payments, Inc. (formerly Official Payments Corporation) by phone at 800‑2PAY‑TAX, (800‑272‑9829) to change the scheduled payment date or to cancel the payment.
DOR recommends that cancelled e-pay, EFW, and credit card payments be rescheduled using DOR’s E-Pay system.
Is the filing deadline for income tax withholding, Form 941N or Form 501N, and payment due dates postponed?
No. The filing deadlines for Forms 941N and 501N and payment due dates have not been postponed.
What are the due dates for the first and second quarter estimated payments?
The estimated payment due April 15, 2020 is now due July 15, 2020; and the estimated payment due June 15, 2020, remains due June 15, 2020.
Are other filing deadlines postponed?
No. The filing deadlines for sales or other taxes and payments are not postponed.
Does this relief postpone the time for filing a Corporation Application for Adjustment of Overpayment of Estimated Tax, Form 4466N?
No. The time for filing Form 4466N is not postponed. However, you may request a refund by filing your income tax return.