Nebraska Relocation Incentive Act Employee Wage Exclusion
A qualified employee may make a one-time election to exclude his or her Nebraska source wages within two calendar years of becoming a Nebraska resident. The election is made on the "Relocation Incentive Act employee wage exclusion" line, Part B, Schedule I, Nebraska Individual Income Tax Return, Form 1040N. A qualified employee is an individual who moves to Nebraska for the purpose of accepting a position of employment and who receives a salary within the statutory annual wage income range for the applicable tax year.
The exclusion is available to qualified employees if the:
- Election is made within two calendar years of becoming a Nebraska resident;
- Nebraska source wages were included in the employee’s federal adjusted gross income;
- Annual wage income of the position accepted by the qualified employee is within the statutory annual wage income range*; and
- Employee was not a resident of Nebraska in the year prior to the year in which residency is claimed for the purposes of the exclusion.
* For tax year 2025, the statutory annual wage income range is $70,000 to $250,000. For tax years beginning on or after January 1, 2026, the statutory annual wage income range will be adjusted each tax year by the same percentage used to adjust the individual income tax brackets. The updated income range for the upcoming year will not be posted until after September of the current year.
Any tax reduction resulting from the exclusion may be recaptured if the qualified employee does not maintain residency in Nebraska for two full calendar years following the calendar year in which the exclusion was taken. The recaptured amount is an underpayment of tax and is due and payable on the tax return due immediately following the loss of residency.
