Registration Requirements in Nebraska
If you own or open a business that operates in Nebraska, you may be required to register with the Secretary of State and obtain a Nebraska Tax ID. The State of Nebraska has a one-stop registration system for businesses to register. The one-stop business registration system can be found here.
S-Corporation Income Tax
Nebraska does not require S corporations to pay income tax; however, they are required to pay the state’s corporation occupation tax. In addition, each individual S corporation shareholder will owe state tax on his or her share of the company’s income. S corporations are required to file Form 1120-SN.
LLC/Partnership Income Tax
Not required to pay income tax or corporation occupation tax to Nebraska. Business income is passed to partners who pay Nebraska income tax on their personal return. Partnerships are required to file Form 1065N.
Corporate Franchise/Privilege Tax
Nebraska’s C corporations and S corporations are subject to Nebraska “Corporation Occupation Tax”. It is a biennial tax, and is based on a business’ net worth. The specific fee due is based on the amount of paid-in stock of the corporation. The tax is graduated, with fees ranging from $26 for $10,000 or less, or paid-in capital stock to $23,990 for $100 million or more of paid-in capital stock.
The Nebraska Department of Revenue does not allow for composite filing for nonresident shareholders/partners.
Individual Income Tax
Nebraska generally conforms to the Internal Revenue Code on a rolling basis, and therefore adopts most federal provisions, unless otherwise modified.
The starting point for computing Nebraska's personal income tax liability is the federal adjusted gross income.
Nebraska has a combined personal exemption and standard deduction, which is based on your filing status. Here are the amounts.
Single filers and those married filing separately: $7,000
Married filing jointly, qualifying widow(er)s and heads of household: $14,000
You are able to take a state defined itemized deduction if you do not use the standard deduction.
State defined personal exemptions are offered. Here are the amounts.
Nebraska does not conform to the Internal Revenue Code (IRC) section 199A, also known as the QBI deduction.
Individual income tax rates vary by income and filing status from 2.46% to 6.84%. Individual income tables are below. Individual income tax returns are filed on Form 1040N.
CARES Act Guidance
Rolling conformity states generally automatically adopt changes to the IRC as they are enacted at the federal level, unless otherwise modified. Nebraska specifically does not conform to the IRC Section 172 of the CARES Act regarding business net operating loss (NOL) provisions. Instead, Nebraska will retain its treatment of business NOLs, not allowing any carryback and allowing only a 20-year carryforward.
S corporation and partnership returns are due on the 15th day of the third month following the close of the tax year. For calendar year filers, the due date is March 15th.
Individual income returns are due on the 15th day of the fourth month following the close of the tax year. For most calendar year filers, the due date is April 15th.
If the due date falls on a weekend or legal holiday, the due date becomes the next business day.
Nebraska corporations that can reasonably expect their tax liability to exceed $400 must make estimated quarterly payments. S corporations may make voluntary estimated payments in the same manner as other corporations.
Taxpayers must make estimated income tax payments if they expect to owe more than $500 in tax at the end of the tax year.
Filing an Extension
S corporations and partnerships have three options to file for an extension of time.
Attaching a copy of a timely-filed Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns, Federal Form 7004, to the Nebraska return when filed
Attaching a schedule to the Nebraska return listing the federal confirmation number and providing an explanation that the electronic request for automatic federal extension was not denied; or
Filing a Nebraska Application for Extension of Time to File Corporation, Fiduciary, or Partnership Return, Form 7004N, on or before the due date of the return.
Individuals may request an extension using one of the following methods:
Attaching a copy of a timely-filed Application for Automatic Extension of Time to File U.S.Individual Income Tax Return, Federal Form 4868, to the Nebraska return when filed;
Attaching a schedule to your Nebraska return listing your federal confirmation number and providing an explanation that you received a federal extension;
Filing a Nebraska Application for Extension of Time, Form 4868N, on or before the due date of the return, when you need to make a tentative Nebraska payment or when a federal extension is not being requested; or
Attaching a copy of the statement or letter submitted with your federal return requesting the automatic extension of time to file for a U.S. citizen residing outside the U.S. or Puerto Rico, to the Nebraska return when filed.
Filing a late return will result in a 5% per month penalty, up to a maximum of 25% of the unpaid tax at the due date or extended filing date.
If your business was formed or is located in another state, but generates income in Nebraska, it may be subject to Nebraska taxes. The rules for taxation of multistate businesses, including what constitutes nexus with a state for the purpose of various taxes, are complicated. If you run such a business, you should consult with a tax professional.
Nebraska Department of Revenue:
Nebraska Secretary of State: