Individuals with Intellectual and Developmental Disabilities Support Act
Neb. Rev. Stat. §§ 77-3154 through 77-3162
LB 937 (2024) (Sections 34 through 42). Operative for taxable years beginning on or after January 1, 2025.
The Individuals with Intellectual and Developmental Disabilities Support Act (Act) establishes one refundable income tax credit for direct support professional employees and three separate nonrefundable income tax credits for employers for tax years beginning on or after January 1, 2025, that require taxpayers to submit an application to the Nebraska Department of Revenue (DOR).
Refundable Income Tax Credit for Direct Support Professional Employees
A direct support professional is any individual who is employed in Nebraska and provides direct care support or any other form of treatment, services, or care for individuals with intellectual and developmental disabilities.
A refundable income tax credit of $500 is available to direct support professionals who:
- Are employed as a direct support professional for at least six months during the taxable year; and
- Worked at least 500 hours as a direct support professional during the taxable year.
Once the direct support professional has met all the required eligibility criteria for the taxable year, they must apply for the tax credit by submitting the Intellectual and Developmental Disabilities Direct Support Professional Tax Credit Application, Form 3157-A, and the Intellectual and Developmental Disabilities Direct Support Professional Employer Verification, Form 3157-V to the DOR. Applications for each taxable year will be accepted starting July 1.
If approved, the DOR will certify the tax credits to the direct support professional who may claim the tax credit by completing the applicable line on their individual income tax return and attaching the tax credit certification to the tax return.
Nonrefundable Income Tax Credits for Employers
Employers who meet the eligibility requirements may apply for one or more of the following nonrefundable income tax credits:
- Employers of one or more direct support professionals may apply for a nonrefundable income tax credit that equals $500 for each direct support professional who:
- Is employed by the employer for at least six months during the taxable year; and
- Worked at least 500 hours for the employer during the taxable year.
- Employers of one or more individuals receiving services pursuant to a Medicaid home and community-based services waiver may apply for a nonrefundable income tax credit that equals $1,000 for each qualified employee who:
- Is employed by the employer for at least six months during the taxable year; and
- Worked at least 200 hours for the employer during the taxable year.
- Employers that provide any of the following services to one or more individuals pursuant to a Medicaid home and community-based services waiver during the taxable year may apply for a nonrefundable income tax credit equal to $1,000 for each eligible individual who received such services from the employer during the taxable year:
- Prevocational;
- Supported employment – individual;
- Small group vocational support; or
- Supported employment – follow along.
Medicaid home and community-based services waiver means a Medicaid waiver approved by the federal Centers for Medicare and Medicaid Services under the authority of section 1915(c) of the federal Social Security Act. The term includes a comprehensive developmental disabilities waiver and a developmental disabilities adult day waiver.
Employers must apply for the tax credits by submitting an application, along with any required supporting documentation to the DOR after one or more individuals have met the eligibility requirements for any of the nonrefundable employer tax credits for the taxable year. Applications for each taxable year will be accepted starting July 1.
If approved, the DOR will certify the tax credits to the employer who may claim the tax credit by completing the applicable line on their income tax return and attaching the tax credit certification to the tax return.
Statutory Limitation
DOR will process applications for all tax credits established under the Act in the order received until the aggregate limit allowed under the Act has been reached. The annual limit for the State fiscal year is:
July 1, 2025 to June 30, 2026 $1,000,000
July 1, 2026 to June 30, 2027 $1,500,000
State fiscal years after $2,000,000
Tax Credit Authorization Table
Applications will be accepted online starting July 1, 2025.
Employee Information
Forms 3157-A and 3157-V
Upload Forms 3157-A and 3157-V
Employer Information
Employer Form(s) TBD
Upload Employer Form(s)
Instructions to Upload Forms
Contact Information
Julie Schuur
Revenue Tax Specialist, Policy Section
Nebraska Department of Revenue
301 Centennial Mall South
PO Box 94818
Lincoln, NE 68509-4818
402-471-1445
julie.schuur@nebraska.gov
