State guides · NE

How Nebraska taxes retirement income

Some 2026 figures pending confirmation  Tax year 2026 · research last updated October 2, 2026

At a glance

Tax rates

Brackets apply to Nebraska taxable income. Other filing statuses are in the rules reference.

Social Security

Nebraska doesn't tax Social Security benefits.

Pensions, IRAs and 401(k)s

Roth conversions

A Roth conversion counts as taxable income for Nebraska. Whether a retirement income exclusion can cover part of it depends on the rules above.

Capital gains

Taxed like other income, at the rates above. A one-time Special Capital Gains/Extraordinary Dividend election on Form 4797N exists only for employer stock acquired through employment and similar narrow cases; not modeled.

Credits and relief for older residents

• Nebraska credit for the elderly or the disabled (Form 1040N line 20). Residents enter the same amount as the federal Credit for the Elderly or the Disabled (federal Schedule R, Schedule 3 line 6d), limited to the federal amount actually allowed. Nonrefundable. Federal Schedule R income limits make this rare for a household with Social Security.

More detail from our research notes

Nebraska taxable income = federal AGI minus the NEBRASKA standard deduction (not the federal amount) or federal itemized deductions less state and local income taxes, plus/minus Schedule I adjustments. Social Security: 100% of the Social Security included in federal AGI is subtracted (Schedule I line 31) with no AGI threshold, since tax year 2024. Military retirement: 100% subtracted (line 32; not modeled). No general pension/IRA exclusion: private pensions, IRA/401(k) distributions and Roth conversions are fully taxable to the extent in federal AGI (except CSRS and RRB above). Additional standard deduction if 65+ or blind 'at the end of 2026' (per 1040N-ES): unmarried (single/HOH) $2,050 per condition; married (joint or separate) and qualifying surviving spouse $1,700 per condition per person ($3,400 if both spouses 65+). The age65.extraDeduction field holds the married figure; use $2,050 for single/HOH. Personal exemption credit: $176 for 2026 (was $171 for 2025) per exemption claimed, including taxpayer and spouse; nonrefundable except that unused credit can offset other taxes. Brackets, standard deduction, 65+ additions and exemption credit are indexed annually. 2026 rates: third and fourth brackets are both 4.55% per Neb. Rev. Stat. 77-2715.03(2)(c)(v); top rate scheduled to fall to 3.99% for 2027 (the 2027 ES draft shows standard deduction $9,100/$18,200/$13,400). Nebraska imposes an 'other tax' equal to 29.6% of the federal additional tax on early distributions and of federal Form 4972 lump-sum tax. No local income taxes.

Pending confirmation

These points were still being confirmed against Nebraska's published 2026 forms when this page was built. Most are waiting on forms the state publishes around the turn of the year.

3 items

• 2026 values come from the 2026 Form 1040N-ES booklet and the DRAFT 2026 Tax Calculation Schedule (draft as of 8/17/2026); no final 2026 schedule/booklet yet (checked 2026-10-02). Confirm against the final 2026 Form 1040N booklet, expected Dec 2026/Jan 2027 at https://revenue.nebraska.gov/individuals/individual-income-tax-forms.
• Rate/bracket arrays list four brackets exactly as the schedule prints them; brackets 3 and 4 share the 4.55% rate (3.99% from 2027) so they are economically three brackets.
• Nebraska federal credit for the elderly or disabled mirrors federal Schedule R; exact current-year wording confirmed only for 2025.

Sources

Every figure comes from these documents, mostly the state's own forms, instructions and statutes.

1. DRAFT 2026 Tax Calculation Schedule (rates and brackets for all filing statuses)https://revenue.nebraska.gov/sites/default/files/doc/tax-forms/drafts/2026_tax_calculation_schedule.pdf
2. 2026 Form 1040N-ES: 2026 standard deduction ($8,850/$17,700/$12,950/$8,850), additional 65+/blind amounts, $176 personal exemption credit, 2026 estimated rate schedulehttps://revenue.nebraska.gov/sites/default/files/doc/tax-forms/2025/f_1040N-ES.pdf
3. 2025 Individual Income Tax Booklet: Schedule I lines 18 (RRB), 31 (Social Security fully excluded, no AGI threshold), 32 (military), 38 (CSRS only, not FERS); line 20 elderly/disabled credit; $171 2025 exemption credithttps://revenue.nebraska.gov/sites/default/files/doc/tax-forms/2025/f_Individual_Income_Tax_Booklet.pdf
4. 2027 Form 1040N-ES draft (2027 indexed standard deduction; 2027 rate change context); DRAFT 2027 Form 1040N-ES (draft as of 9/25/2026): 2027 standard deduction $9,100/$18,200/$13,400/$9,100, 65+/blind $2,150 unmarried / $1,750 married, $181 personal exemption credit, 2027 estimated rate schedulehttps://revenue.nebraska.gov/sites/default/files/doc/tax-forms/drafts/f_1040n-es.pdf
5. Nebraska itemized deductions: federal Schedule A line 17 less the full line 5a (1040N lines 6-10, 2025 booklet pp. 13-14)https://revenue.nebraska.gov/sites/default/files/doc/tax-forms/2025/f_1040n_booklet.pdf
6. Neb. Rev. Stat. 77-2715.03(2)(b)(ii)-(iii), (c)(v)-(vi): rates three and four 4.55% for TY2026, 3.99% for TY2027 and later; (3) bracket indexing rounded to $10https://nebraskalegislature.gov/laws/statutes.php?statute=77-2715.03
7. July 2026 General Fund certification: 2026 session bills' individual income tax impact only +$2.192M (LB 901, not rates/retiree items); no 2026 act changed rateshttps://www.nebraskalegislature.gov/FloorDocs/109/PDF/Agencies/Legislative_Council/420_20260713-100129.pdf

Taxtirement's Nebraska calculation is also checked against a second, independent implementation on 1,000 random households. How we check our numbers.

This page summarizes Nebraska's 2026 rules as Taxtirement applies them, for education and planning. It isn't tax advice, and it doesn't cover every situation (for example part-year residents, businesses or military-only provisions). Rules change; check the state's current instructions, or a tax professional, before you act. Spotted something wrong? Tell us.