Individuals with Intellectual and Developmental Disabilities Support Act Nonrefundable Tax Credit
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) established three separate nonrefundable income tax credits for employers for tax years beginning on or after January 1, 2025.
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.
Employment and service dates in the calendar year qualify employers for the credit(s) to be claimed on the employer’s income tax return that begins on or after January 1 of that calendar year.
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 may apply for the tax credits by submitting the Individuals with Intellectual and Developmental Disabilities Support Act Employer Tax Credit Application, Form 3154 through the Electronic Document & Application Submission Hub (eDASH) via the eDASH link below.
If approved, the Nebraska Department of Revenue (DOR) will certify the tax credits to the employer. The employer will need the Certification Number and the Amount of Approved Credit from the Credit Authorization section of their approved Form 3154 when claiming the credit. The certified credit may be claimed by completing the Nebraska Incentives Credit Computation, Form 3800N, and attaching the Form 3800N to the applicable income 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
Instructions to Apply for the Tax Credits
The submission link for eDASH will be enabled in February 2026. Credits can be used starting with the 2025 tax year income tax returns.
***Reminder: The Form 3154 will be electronically submitted using the eDASH link above. This application method is fast, easy, and secure.***
