13 April 2022 Nebraska enacts individual and corporate income tax rate cuts On April 13, 2022, Governor Pete Ricketts signed into law 2022 NE LB 873, which gradually reduces the state's individual and corporate income tax rates and accelerates the phaseout of taxing Social Security income under the state's personal income tax. The current top Nebraska corporate income tax rate, which applies to income over $100,000, is 7.5%. 2022 NE LB 873 reduces the top rate as follows:
2022 NE LB 873 adopts a similar phased-in reduction for Nebraska's individual income tax rates. The top individual rate, which is currently 6.84% and applies to taxable income of $29,000 or more for individuals filing separately (or $58,000 or more if married filing jointly), is reduced as follows:
2022 NE LB 873 also phases in, by 2025, an exemption for Social Security income from Nebraska's individual income tax, to the extent that income is included in federal adjusted gross income. In 2021, Nebraska enacted corporate income tax rate cuts with the stated intent to further reduce the top corporate income tax rate in tax years 2024 and 2025 (see Tax Alert 2021-1063). LB 873 implements rate cuts for these years as well as ones in 2026 and 2027. Unlike recently passed corporate and individual income tax rate reductions in other states (e.g., Iowa and Indiana), these rate reductions do not depend on state tax revenue targets being met.
Document ID: 2022-0614 | |||||
