How Nebraska taxes a paycheck
Nebraska's LB 754 of 2023 set a five-year path from a 6.64% top rate down to 3.99%: 5.84% in 2024, 5.2% in 2025, 4.55% in 2026 and 3.99% in 2027. The 2026 schedule has three rates for a single filer: 2.46% on the first $4,130 of taxable income, 3.51% to $24,760 and 4.55% above, with married thresholds at $8,250 and $49,530. The standard deduction is $8,850 single and $17,700 married, and personal exemptions are a $176 credit per person and per dependent.
The same law is phasing out tax on Social Security benefits, fully exempt from 2025, which does not affect wages. There are no local income taxes in Nebraska; Omaha and Lincoln rely on property and sales tax.
How much taxes are taken out of paychecks in Nebraska?
On a $60,000 salary in 2026, a single filer in Nebraska pays about $5,020 in federal income tax, $4,590 in Social Security and Medicare, and about $1,850 in Nebraska income tax, leaving roughly $48,540 a year or $1,867 every two weeks. The state share is 3.1% of gross, and the 2026 cut is worth about $330 a year on that salary against 2025.
At $150,000 the tax is about $5,950, an effective rate of 4%; next year's cut to 3.99% will take roughly $650 off that.
Nebraska compared with its neighbours
Nebraska borders two no-tax states, South Dakota and Wyoming, and four that tax wages: Iowa (flat 3.8%, about $1,630 on a $60,000 single salary), Missouri (about $1,650), Kansas (about $2,550) and Colorado (about $1,930). Nebraska's $1,850 sits in the middle of the group and will move to the bottom when the 3.99% rate arrives in 2027.
The Omaha metro extends into Iowa, and the Council Bluffs comparison is close: Iowa's flat 3.8% with the federal deduction and Nebraska's graduated rates with a smaller deduction land within about $220 of each other on $60,000.
Withholding forms and filing status in Nebraska
Nebraska employers withhold from Form W-4N, on which employees claim allowances; the tables apply the three brackets after the standard deduction, and the $176 credit per person is applied on the return. Married couples get doubled brackets ($49,530 for the 4.55% rate) and a $17,700 deduction, so a one-earner couple on $60,000 pays about $1,440 against a single filer's $1,850.
Nebraska's Form 1040N is due 15 April, and the $176 credits are claimed there rather than through withholding. Nebraska has no reciprocal agreements. Iowa residents working in Omaha pay Nebraska tax on those wages and credit it in Iowa; Nebraska residents working in Council Bluffs do the reverse. LB 754's schedule to 3.99% in 2027 is in statute and does not depend on revenue triggers, unlike the plans in Kentucky, Mississippi and North Carolina.