The Nebraska Department of Revenue announced that an updated Circular EN, Nebraska Income Tax Withholding for Wages, Pensions and Annuities, and Gambling Winnings, will not be issued for 2019. Employers are instructed to continue to use the 2017 income tax wage-bracket and percentage method withholding tables for 2019.

Supplemental withholding rate remains the same

Where supplemental wages (bonuses, commissions, overtime pay, severance pay associated with Nebraska employment, and sales awards) are paid at the same time as regular wages, the income tax deducted and withheld is determined as if the total of the supplemental and regular wages were a single wage payment for the regular payroll period.

If supplemental wages are paid at a different time, the employer may determine the withholding by adding the supplemental wages either to the regular wages for the current payroll period, or to the regular wages for the last preceding payroll period within the same calendar year. The employer may also elect to withhold on the supplemental wages by using a flat 5% withholding rate.

2018 Forms W-2 and annual reconciliation due by January 31, 2019

State copies of 2018 Forms W-2, W-2G, 1099-MISC, 1099-R, and Form W-3N, Nebraska Reconciliation of Income Tax Withheld, are due January?31,?2019. These forms must be e-filed when the employer has more than 50 forms to report. See the Department's Form W-2 specifications, last updated November 2017, for more information on electronic filing.

See also the Department's frequently asked questions regarding electronic filing of Forms W-2.

Special withholding procedures for employers using the wage-bracket tables remain the same

The "special withholding rate" remains at 1.5%. Employers using the wage bracket tables may continue to use the shaded/non-shaded areas of the tables to determine if the special withholding procedures apply. The special withholding procedures must be followed if the calculated result is not at least 1.5% of the employee's taxable wages. See page 2 of the 2017 Circular EN and the Department's frequently asked questions about withholding tax for details on when to use the special withholding procedures, when they may be avoided and the penalties that may be assessed for failure to use the special withholding procedures.

For more information on Nebraska withholding tax, see the Department's website.

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