On March 25, 2025, Nebraska Governor Jim Pillen signed into law LB 297, which reduces the 2025 state unemployment insurance tax rates by returning them to the 2024 rates. Employers will remain in the category assigned to them for 2025 but the 2024 SUI tax rate for that category will apply. Nebraska has 20 rate categories. This change is estimated to lower employer 2025 SUI contributions by $44 million.

The SUI tax rates for 2025 continue to range from 0% to 5.4% and the rate for new employers remains at 1.25% (5.4% for new construction employers). The 2025 SUI wage base is $9,000 and $24,000 for Tax Category 20 employers.

A portion of the SUI tax rate for 2025 continues to go to the special state unemployment insurance tax (SUIT) fund. For 2025, the SUIT rate is 20% of the combined SUI tax rate, up from 5% in 2024. An employer will only receive credit for 80% of the contributions it pays for 2025 to its reserve account. The remaining 20% is diverted to the SUIT account. When completing the federal Form 940 for 2025, only 80% of the combined SUI tax rate is reported as SUI contributions.

2025 SUI rate notices revised

SUI rate notices that originally mailed on December 26, 2024, have been revised to reflect the rate adjustment under LB 297 and can be accessed at NEworks.nebraska.gov. Paper SUI rates will mail sometime in April. (Nebraska Department of Labor, 2025 Updated Tax Rates.)

Ernst & Young LLP insights

Nebraska employers should confirm that they are using the SUI tax rate as contained on the adjusted notice from March/April 2025 before filing their first quarter Nebraska SUI return.