You must file a Form 1040N or 1040NS if you are required to file a federal return and report a federal liability. You also must file if you have $5,000 or more of Nebraska adjustments to federal Adjusted Gross Income (AGI), including non-Nebraska state and local bond interest income exempt from federal tax.
Nebraska accepts and encourages electronic filing. Some electronic filing options allow you to file both the federal and state returns in one step. Advantages include computer filing accuracy and much faster refund processing. You can also have your refund directly deposited into your bank account, or if you have a balance due, you can have your payment automatically debited from your bank account. Contact your tax preparation professional for information on your eligibility and how you can participate, or go to our E-File section on this Web site and find out how to file your return over the Internet.
Nebraska has its own income tax table. Tax rates vary based on filing status. Click on the appropriate year for the rates:
| Tax Year 2008 | Tax Year 2007 |
Your Nebraska PIN is needed only if you file your Nebraska return through the NebFile system. This PIN, along with your social security number, is your access to NebFile. If you received a Nebraska Individual Income Tax Booklet, your PIN is located under your name and address label attached in the center of the booklet. If you received a postcard, your PIN is printed in the gray box.
If you did not receive a tax booklet or postcard, or have lost it, you can look it up on the Internet by going to www.revenue.ne.gov/nebfile (Step 3 -- you will need to know your social security number and your drivers' license number). You can also contact our Taxpayer Assistance office at 1-800-742-7474 (toll free in Nebraska and Iowa) or 1-402-471-5729. You will need to provide proof of your identity before your PIN can be given to you over the telephone.
To check on the status of your current year original return, click here; OR you can call 1-800-742-7474 (toll free in Nebraska and Iowa) or 1-402-471-5729 and select option 1. This phone line may be accessed 7 days a week, 24 hours a day.
If you prefer to file using paper forms, your refund will be delayed. Because of budget-related staff reductions, processing of paper-filed returns could be delayed up to three months. If you want your refund faster, you should use one of the electronic filing options, like Federal/State Joint E-filing or NebFile. Another option is to use a paid preparer who supports the Federal/State electronic filing. Click here for more information on electronic filing.
Individuals filing amended returns for a refund should allow from two to six months for their refund checks.
Late filed return -- 5% per month (25% maximum) of the unpaid tax at due date or extended filing date (extension of time).
Late payment -- 5% of unpaid tax at due date or extended filing date (extension of time).
Partial payment -- 5% of unpaid tax at due date or extended filing date.
If you are unable to pay the full amount of tax due, you should file your Nebraska income tax return and pay as much as you can by the filing date. Penalties and interest will accrue on any unpaid balance until it is fully paid.
If you are in this situation and have questions about paying your taxes by any of the options below, please contact the Nebraska Department of Revenue office nearest you (just click on "Contact Us" for locations and phone numbers); or call Taxpayer Assistance at 1-800-742-7474 (toll free in Nebraska and Iowa), or 1-402-471-5729 and speak with a representative who will explain the payment options available to you. It is your responsibility to contact the department if you can not pay the tax which is due.
You have three options if you can't pay all your tax when you file your tax return:
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You can pay the entire amount over a 90-day period. You do not need to fill out any forms; Just make four equal payments as follows, one payment with your tax return and then make the remaining three payments every 30 days. You will receive an updated balance due statement after each payment indicating the amount remaining to be paid. |
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You can also pay your balance due by credit card. These payments are originated through Official Payments Corporation (OPC). Eligible credit cards include VISA, MasterCard, Discover, and American Express. A convenience fee of 2.49% (a minimum of $1.00 will be charged) of the tax payment is charged to the card you use. This fee is paid to OPC and will appear on your credit card statement separately from the tax payment. You will be told what the fee is during the transaction and you have the option of canceling it. You can make your secure credit card payment over the internet at www.officialpayments.com or by telephone at 1-800-272-9829. You will be asked for your jurisdiction code, which is 3700. |
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Payments extending over 90 days can be requested to be made by Electronic Funds Transfer (EFT) To request an installment payment agreement, you must complete Form 27D, Payment and Authorization Agreement. Just click on this form, complete and print it, and mail to the Nebraska Department of Revenue, P.O. Box 94609, Lincoln, NE 68509-4609. The department will respond to you by either accepting or denying this installment payment proposal. These payments will be automatically withdrawn from your bank account as scheduled. |
A Nebraska Individual Estimated Income Tax Payment Voucher, Form 1040N-ES, must be filed by every resident and nonresident of Nebraska if the individual's Nebraska income tax, after allowance of personal exemption credits, can reasonably be expected to exceed withholding and other credits by $500 or more. You do not have to pay estimated tax if you were a U.S. citizen or resident and you had no tax liability for the full 12-month preceding tax year.
The estimated tax may be paid in full with the first payment voucher, which is due on or before April 15, 2009; or in equal installments on April 15, 2009, June 16, 2009, September 15, 2009, and January 15, 2010.
If you are an employee with amounts being withheld from your earnings, you may ask your employer to withhold an additional amount for state taxes rather than making these four estimated income tax payments.
The rate of interest on delinquent payments of any taxes or special assessments is:
14% through December 31, 1992
7% January 1, 1993 through December 31, 1994
9% January 1, 1995 through December 31, 2002
6% January 1, 2003 through December 31, 2006.
8% January 1, 2007 through December 31, 2008.
5% January 1, 2009 to present.
Residents must report all income to Nebraska, and will receive a credit for taxes paid to other states by completing Form 1040N and Nebraska Schedule II. Nonresidents and partial-year residents must file a Form 1040N and a Nebraska Schedule III to compute the Nebraska tax due.
Yes. Federal adjusted gross income is reduced by either the allowable state standard deduction or the allowable state itemized deduction amount, whichever is greater. For tax years prior to 2006, special instructions must be followed by higher income taxpayers, as the deductions are phased out for state purposes similar to federal phase-outs.
The state standard deductions are as follows:
| 2008 | |
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Married, filing joint - $10,900 |
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Single - $5,450 |
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Head of household - $8,000 |
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Married, filing separate - $5,450 |
| 2007 | |
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Married, filing joint - $10,700 |
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Single - $5,350 |
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Head of household - $7,850 |
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Married, filing separate - $5,350 |
| 2006 | |
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Married, filing joint - $8,580 |
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Single - $5,130 |
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Head of household - $7,550 |
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Married, filing separate - $4,290 |
| 2005 | |
| If your federal adjusted gross income is greater than $145,950 ($72,475 if married filing separate), a worksheet must be completed. | |
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Married, filing joint - $8,320 |
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Single - $4,980 |
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Head of household - $7,330 |
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Married, filing separate - $4,160 |
Contact one of our Taxpayer Assistance offices for more information.
You must file a Form 1040N and you will receive credit for taxes paid to the other state by completing a Nebraska Schedule II and attaching a copy of the other state's income tax return. Nebraska income tax is imposed on all income which is earned while a resident of this state and which is not taxed by another state (non-taxing state's income).
To determine the amounts to enter on Nebraska Schedule II, lines 62 and 64, see the 2008 Conversion Chart.
For individuals reporting federal adjusted gross income not greater than $22,000, the credit is refundable and is 100% of the federal credit. For individuals reporting federal adjusted gross income over $22,000 but not more than $29,000, the credit is refundable and the amount of the credit ranges from 90% to 30% of the federal credit. The percentage of the federal credit is reduced by 10% for each $1,000 of adjusted gross income over $22,000.
For individuals with adjusted gross income in excess of $29,000, the credit is nonrefundable and is limited to 25% of the federal credit allowed.
Yes. Residents can claim the year-specific credit for each federal exemption reported on line 4 of Form 1040N or line 5 of Form 1040NS. Nonresidents and partial-year residents claim the credit on the Nebraska Schedule III. In tax years prior to 2006, higher income individuals may have this credit phased out or reduced, so you should refer to the Personal Exemption Table in the appropriate tax year booklet. The personal exemption credits by year are:
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2008 - $113 |
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2007 - $111 |
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2006 - $106 |
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2005 - $103 |
If you have not received a Form W-2 from an employer by January 31st, call or write to your employer requesting the form, giving them your current mailing address. Nebraska will accept a photocopy of your W-2 if the original is lost. Your next step would be to call the IRS at 1-800-829-1040 to obtain a substitute Form W-2. Nebraska will accept a copy of the substitute W-2 filed with the IRS. A state amount withheld and NE (Nebraska) should be written on the form prior to mailing it to the Department of Revenue.
If you file electronically through an approved tax preparer, you may obtain an automatic extension to file your Nebraska return.
When an extension of time is obtained, INTEREST is still due on any unpaid tax. An extension of time cannot exceed a total of seven months after the due date of the return. You can make a tentative payment to stop interest from accruing. If such payment is made, Nebraska Application for Extension of Time, Form 4868N, must also be filed (Form 4868N can not be filed electronically). When filing your Nebraska Individual Income Tax Return, claim the tentative payment on line 30, Form 1040N, as an estimated tax payment.
United States interest and dividend income which is exempt from state taxation includes:
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Series E, F, G, and H savings bonds |
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U.S. Treasury bills |
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U.S. Government notes and bonds |
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U.S. Government certificates |
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Interest on debentures issued to mortgagees of mortgages foreclosed under provisions of the National Housing Act, if insured after February 3, 1938 |
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Retirement bonds as provided by I.R.C. section 409 |
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Federal Farm Credit Bank Consolidated System-wide bonds |
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Federal Land Banks and Associations |
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Federal Intermediate Credit Bank |
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Commodity Credit Corporation |
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Federal Farm Mortgage Corporation |
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Federal Home Loan Banks |
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Reconstruction Finance Corporation |
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General Services Administration Participation Certificates |
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Central Bank for Cooperatives (interest only) |
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Federal Reserve Banks |
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Federal Savings and Loan Insurance Corporation |
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Production Credit Association (interest only) |
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Tennessee Valley Authority bonds |
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Postal Service bonds |
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Federal Deposit Insurance Corporation (interest only) |
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Student Loan Marketing Association (interest only) |
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Resolution Trust Corporation |
Dividends and other income received from a regulated investment company are exempt to the extent they represent U.S. Government interest and dividend income listed above. For more information, see Individual Income Tax Regulation 22-002.05A.
Allowable adjustments are reported on line 52 of the Nebraska Schedule I.
Several quasi-governmental organizations issue bonds which are not considered to be backed by the U.S. Government. Interest or dividend income from the following are not deductible for Nebraska income tax purposes:
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Federal or State Banks |
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Federal or State Savings and Loan Associations |
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Building and Loan Associations |
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Postal Savings Accounts (discontinued in 1996) |
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Export Import Bank bonds |
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Federal or State Credit Unions |
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Interest on debentures issued to mortgagees of mortgages foreclosed under the National Housing Act if insured before February 3, 1938 |
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Interest on federal income tax refunds |
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Farmers Home Administration |
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New Community debentures |
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Merchant Marine bonds |
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Ship Financing bonds |
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U.S. Merchant Marine Ship notes |
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U.S. Merchant Marine Offshore Ship Services notes |
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Federal Home Loan Mortgage Corporation |
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World Bank |
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International Bank for Reconstruction and Development bonds |
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Asian Development Bank notes and bonds |
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Inter-American Development Bank bonds |
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Interest from U.S. Government Life Insurance (unless exempted by I.R.C. section 101[d][1][B]) |
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Bankers' Acceptance |
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Certificates of Deposit |
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Penn Central Transportation certificates |
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Federal Financing Bank |
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Federal National Mortgage Association (FNMA's) |
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Government National Mortgage Association (GNMA's) |
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Chrysler Corporation secured notes |
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Lockheed convertible bonds |
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Washington Metropolitan Area Transit Authority bonds |
Complete the first eight lines of the form to see if you need to report this penalty. If you need assistance with the rest of the form, contact your nearest Nebraska Department of Revenue office, or call 1-800-742-7474 (toll free in Nebraska and Iowa) or 1-402-471-5729, and we will assist you in calculating the penalty.
If you and your spouse file a joint federal return and your spouse is a resident of Nebraska, you may elect to either file a joint Nebraska return or each spouse may file married filing separately with Nebraska. Be sure to attach a copy of your military W-2 to substantiate your non-resident active duty status. If you file a joint return, you can deduct the active duty military pay of the nonresident military service member included in the federal adjusted gross income on line 59 of the Nebraska Schedule I. For more information on this subject, refer to the information guide, Nebraska Income Tax for Military Service Members.
Those winnings are part of your federal adjusted gross income and need to be included on your Nebraska return. You may also need to complete an income tax return for the other state to report those winnings to that state.
Upon filing an individual income tax return with the other state, you will receive a credit for any taxes properly paid to the other state by completing a Nebraska Schedule II and attaching it to your Form 1040N, along with a copy of the other state's return.
Make any corrections that are necessary on the address label, then use the corrected label on your return. You can also make changes by filing a Nebraska Change Request for Individual Income Tax, Form 22A.
For tax years 2005 and forward, Nebraska law continues to require that any state income tax deducted on line 5 of the Federal Schedule A be included as an addition to income on line 8 of Nebraska Form 1040N. If instead, you deducted your sales tax paid during 2007 on line 5 of Federal Schedule A, then you should enter -0- on line 8 of Form 1040N.
Yes. Nebraska residents and partial-year residents who have a federal earned income tax credit are allowed a state credit equal to 10% (.10) of the federal credit.
Yes. Nebraska has the Nebraska College Savings Program deduction. The account owner deducts from federal adjusted gross income the annual contributions he or she makes to the Nebraska College Savings Program (Nebraska Educational Savings Plan Trust; including, College Savings Plan of Nebraska, TD AMERITRADE 529 College Savings Plan, AIM College Savings Plan, State Farm College Savings Plan) which is administered by the State Treasurer. There is a maximum state deduction of $5,000 for single, head of household, and married filing jointly filers; and $2,500 for married, filing separately filers.
For more detailed information about the Nebraska State Treasurer's College Savings Program, visit their Web site.No. Only contributions made to the Nebraska College Savings Program, administered by the Nebraska State Treasurer, qualify for the deduction.
When a Nebraska College Savings Program (Nebraska Educational Savings Plan Trust; including, College Savings Plan of Nebraska, TD AMERITRADE 529 College Savings Plan, AIM College Savings Plan, State Farm College Savings Plan) is rolled over to another section 529 savings plan administered by a state other than Nebraska, the Nebraska College Savings Program account is considered to be canceled. The account owner is required to recapture any Nebraska College Savings Program contribution previously deducted for the years the canceled (rollover) account was in existence. The recapture is reported on Nebraska Schedule I for the tax year of the account rollover.
Earnings generated from the Nebraska Long-Term Care Saving Plan Administered by the State Treasurer are exempt and may be subtracted to the extent they are included in federal adjusted gross income. To deduct the earnings, please combine them with the Long-Term Care Savings Plan Contribution deduction and enter the total on line 58 of the 1040N - Schedule I.
The Nebraska Department of Revenue will be reasonable and work with you if your records have been destroyed by natural disaster. This does not, however, exclude you from filing returns or reports or from being audited.
Every effort should be made to find lost records, or partial records that may have "survived" a disaster. If partial records are recovered, they are the best place to begin a reconstruction.
A reconstruction of records is best approached in reverse order. In other words, begin with the end of the year and work backward. The following steps may be helpful in the reconstruction process:
For bank records, contact your bank. It could be expensive to get copies of canceled checks, but they are available.
In order to continue the filing or audit process, there are options available:
Nebraska Revised Statute Section 77-27, 115 provides penalties for willful failure to file or to maintain records. Penalty may be abated if the lack of records was due to a natural disaster or other casualty.