How Nebraska withholds on a bonus
Nebraska's 2026 Circular EN lets employers withhold a flat 3.5% on supplemental wages paid at a different time from regular wages, or add them to the current or preceding period's wages and withhold on the total. The 3.5% is below Nebraska's 4.55% top rate for 2026 and reflects the rate cuts under LB 754. On a $10,000 bonus the percentage method withholds $2,200 federal, $620 Social Security, $145 Medicare and $350 Nebraska, leaving $6,685. Nebraska has no local income taxes.
Under the aggregate method Nebraska applies its three brackets to the combined paycheck: a $60,000 earner's bonus is withheld at 4.55%, about $455 rather than $350; the federal line rises to about $2,700. Nebraska's top rate falls to 3.99% in 2027, which will bring the flat supplemental rate and the top bracket close together.
What the withholding means for your Nebraska return
For a $60,000 single filer, whose Nebraska marginal rate is 4.55% above $24,760 of taxable income, the 3.5% supplemental withholding leaves a balance of about $105 per $10,000 on the return; the federal side returns roughly $750, so the net effect at filing is still a refund. Iowa residents who earn a bonus in Nebraska are withheld for Nebraska and credit it at home. The Nebraska paycheck calculator shows the marginal rates for any salary. Allowances on Nebraska Form W-4N do not reduce the flat 3.5% withheld from a separately paid bonus; they apply only under the aggregate method, where the bonus is combined with the period's regular wages.