Nebraska state income tax
Nebraska has a state income tax. It is graduated, with a top marginal rate of 4.55%. Four statutory brackets, but rates three and four are now identical: 2.46%, 3.51%, 4.55%, 4.55% for taxable years beginning in 2026. This is the result of LB 754 (2023), which accelerated and extended the rate-reduction schedule begun by LB 1107 (2022): top rate cut from 6.84% (2022) to 6.64% (2023), 5.84% (2024), 5.20% (2025), 4.55% (2026), with a further scheduled drop to 3.99% in 2027 (subject to revenue triggers). Bracket dollar thresholds are inflation-indexed annually by the Tax Commissioner. Capital gains are taxed as ordinary income (no special lower rate).
Does Nebraska have a state income tax?
Yes. Nebraska taxes individual income on a graduated schedule topping out at 4.55%. Four statutory brackets, but rates three and four are now identical: 2.46%, 3.51%, 4.55%, 4.55% for taxable years beginning in 2026. This is the result of LB 754 (2023), which accelerated and extended the rate-reduction schedule begun by LB 1107 (2022): top rate cut from 6.84% (2022) to 6.64% (2023), 5.84% (2024), 5.20% (2025), 4.55% (2026), with a further scheduled drop to 3.99% in 2027 (subject to revenue triggers). Bracket dollar thresholds are inflation-indexed annually by the Tax Commissioner.
| Item | Nebraska |
|---|---|
| State income tax | Yes, graduated |
| Top marginal rate | 4.55% |
| Capital gains | Taxed as ordinary income, up to 4.55% |
| State sales tax | 5.5% (plus local) |
| Avg. property tax rate | 1.43% of home value |
| Estate / inheritance tax | Inheritance tax |
How does Nebraska tax capital gains?
Nebraska has no separate, lower rate for capital gains. They are taxed as ordinary income at the same rates as your wages, up to 4.55%, on top of federal capital gains tax. See how capital gains tax works in 2026.
What about retirement income in Nebraska?
Retirement income is taxed differently from wages in many states. For how Nebraska treats Social Security, pensions, and 401(k)/IRA withdrawals, see Nebraska retirement taxes.
Sources
- Nebraska income tax rates and brackets: Nebraska Department of Revenue / Taxation.
- Nebraska capital gains treatment: Nebraska tax authority.
- Nebraska sales tax: Nebraska Department of Revenue.