Nebraska Income Tax Brackets 2027 by Filing Status
How the state's progressive rates work and what changed with the recent tax cuts
Overview
Nebraska taxes wages with a progressive income tax. That means your income is split into slices and each slice is taxed at its own rate, so moving into a higher bracket only raises the tax on the dollars inside that bracket, never on all of your income.
For 2027 the statutory structure has three effective tiers after the phase-down passed in 2023 (LB 754): roughly 2.46%, 3.51%, and a top rate of 3.99%.
The top rate has fallen fast: 6.64% for 2022, 5.84% for 2023, 5.20% for 2024, 4.55% for 2025, and 3.99% for 2026. Bracket thresholds are indexed for inflation each year, so check the Nebraska Department of Revenue's current tables for the exact dollar cut-offs for single, married filing jointly, and head of household filers.
| 2027 tier | Approx. rate | Applies to |
|---|---|---|
| Lowest | 2.46% | First slice of Nebraska taxable income |
| Middle | 3.51% | The next slice |
| Top | 3.99% | Income above the top threshold |
| Year | Top individual rate |
|---|---|
| 2022 | 6.64% |
| 2023 | 5.84% |
| 2024 | 5.20% |
| 2025 | 4.55% |
| 2026 | 3.99% |
How a bracket calculation works
Suppose a single filer has Nebraska taxable income of $50,000. The first slice is taxed at the lowest rate, the next slice at the middle rate, and only the portion above the top threshold is taxed at 3.99%.
The result is an effective rate well below the top marginal rate. That is why the headline top rate overstates what most households pay.
Nebraska taxable income starts from federal adjusted gross income, then applies Nebraska adjustments and the standard deduction. Social Security benefits are fully exempt from Nebraska tax starting in 2024, and a portion of military retirement is exempt, which mainly matters for retirees rather than wage earners.
Brackets vs. paycheck withholding
Your employer does not use the filing brackets directly. Payroll uses Nebraska Circular EN, a withholding schedule built around the W-4N allowance system.
Those withholding tables use their own rate steps, which is why the amount withheld each pay period can differ slightly from your final liability on Form 1040N. Any gap shows up as a refund or a balance due in April.
To see how state withholding is calculated from your gross pay and W-4N allowances, use the Nebraska income tax withholding calculator. To see the full picture of federal tax, FICA, and Nebraska tax together, use the Nebraska paycheck calculator.
Is Nebraska a high-tax state?
Historically Nebraska sat in the upper-middle range for income taxes. With a 3.99% top rate in 2027, it is now below many neighbors and far below states such as Iowa's former schedule.
Nebraska also has no local wage tax: Omaha, Lincoln, and other cities do not withhold a city income tax, so the state rate is the whole state-level story for paychecks.
Property taxes, which Nebraska relies on heavily, are a separate matter and do not appear on a paycheck.
Key takeaways
- Three tiers in 2027, top rate 3.99%.
- Rates apply only to income inside each bracket.
- Thresholds are inflation-indexed; confirm annually.
- Withholding follows Circular EN, not the 1040N brackets.
- No city income tax anywhere in Nebraska.
If you want a one-number answer to "what rate do I pay?", read our Nebraska state tax rate guide.
Frequently asked questions
Does Nebraska have a flat tax?
No. Nebraska uses a progressive schedule with multiple brackets.
The phase-down narrowed the gap between rates, but income is still taxed in slices, and the lowest slice is taxed at roughly 2.46%.
Do married couples get wider brackets?
Yes. Married filing jointly thresholds are roughly double the single thresholds, so a two-income household is not pushed into the top tier as quickly.
Head of household filers have thresholds between the two.
Will rates fall further after 2026?
The 2023 law set 3.99% as the end point for the individual top rate. Future changes would require new legislation, so watch for announcements from the Legislature and the Department of Revenue each session.
Where do I report Nebraska income?
Residents file Form 1040N. Part-year residents and nonresidents with Nebraska wages file the same form and complete Schedule III to allocate income to Nebraska.