August 3, 2023
Nebraska law gradually lowers personal income tax rates over four years, starting in 2024
Nebraska Governor Jim Pillen signed into law LB 754, which gradually reduces the state's top personal income tax rates and collapses the tax brackets from four to three over four years, starting in 2024.
Under LB 754, the top individual income tax rate is lowered from 6.84% to 5.84% for tax year 2024, 5.2% for 2025, 4.55% for 2026 and 3.99% for 2027 and subsequent years.
LB 754 tax rates and bracket structure starting in 2024
Currently, the supplemental rate of withholding on bonuses and irregular wage payments is 5%. In light of the reduced tax rates for brackets three and four, it is likely the supplemental rate of withholding will be reduced starting in 2026. (2022 Nebraska Circular EN, p.9.)
Published by NTD’s Tax Technical Knowledge Services group; Andrea Ben-Yosef, legal editor