NEBRASKA PAYCHECK CALCULATOR

Top Rate Cut to 4.55% for 2026 Social Security Fully Exempt High Property Taxes

Nebraska’s top income tax rate dropped to 4.55% for 2026, down from 5.20% the year before, and it’s set to fall again to 3.99% in 2027 under a multi-year phase-down the legislature locked in back in 2023. That’s a real change for anyone whose paycheck has felt the same for years. The catch is Nebraska pairs that improving income tax picture with some of the highest property taxes in the country, so the state’s overall tax story depends a lot on whether you rent or own.

A Nebraska paycheck carries the usual four deductions: federal income tax, Social Security, Medicare, and Nebraska state income tax. There’s no local income tax anywhere in the state and no state disability insurance or paid family leave withholding. One genuinely good piece of news for retirees: Nebraska fully exempted Social Security benefits from state tax starting with the 2025 tax year, so that income is now off the table entirely. To see how Nebraska stacks up against its neighbors, check the Iowa paycheck calculator, the Kansas paycheck calculator, or the South Dakota paycheck calculator.

Every Deduction on a Nebraska Paycheck

• Federal income tax: Withheld based on your W-4, using the 2026 federal brackets (10% to 37%) and the federal standard deduction of $16,100 single, $32,200 married filing jointly, or $24,150 head of household.
• Social Security: 6.2% of wages up to $184,500 for 2026. Withholding stops for the rest of the year once you hit that wage base.
• Medicare: 1.45% on all wages, plus an extra 0.9% once you earn more than $200,000 single or $250,000 married filing jointly.
• Nebraska state income tax: Graduated, 2.46% to 4.55% for 2026, using Nebraska’s own standard deduction ($8,850 single or head of household, $17,700 married filing jointly) rather than the federal figure, plus a $176 personal exemption credit per exemption claimed.
• Not deducted from your paycheck: Nebraska has no local income tax, no state disability insurance, and no paid family leave tax on employees.

Nebraska’s Multi-Year Rate Cut, Bracket by Bracket

Legislative Bill 754, signed in 2023, set Nebraska on a path to trim its top individual income tax rate every year through 2027. Here’s the full 2026 schedule from the Nebraska Department of Revenue, along with where the top rate has been and where it’s headed.

Filing Status	2.46% Bracket	3.51% Bracket	4.55% Bracket (2026)
Single / Married Filing Separately	$0 to $4,130	$4,130 to $24,760	Above $24,760
Head of Household	$0 to $7,700	$7,700 to $39,620	Above $39,620
Married Filing Jointly	$0 to $8,250	$8,250 to $49,530	Above $49,530

The top rate itself tells the bigger story: it stood at 5.84% for tax year 2024, dropped to 5.20% for 2025, sits at 4.55% now for 2026, and is scheduled to fall to 3.99% in 2027. That’s a full two-percentage-point cut over four years. A single filer earning $70,000 in 2026 subtracts the $8,850 Nebraska standard deduction to get $61,150 in state taxable income, which works out to roughly $2,481 in Nebraska tax after the $176 personal credit, a smaller bill than the same person would have owed under the 2025 schedule.

Nebraska vs Nearby States at $70,000 (Single Filer)

Nebraska sits in a region where tax approaches vary widely, from Iowa’s flat rate to South Dakota’s total absence of income tax. Here’s how a $70,000 single filer’s state tax bill compares. Figures are state income tax only and do not include federal tax or FICA.

State	State Tax Structure	State Tax Owed on $70k	Sales Tax
Nebraska	Graduated, 2.46% to 4.55%	~$2,481	5.5% (state)
Iowa	Flat 3.8%	~$2,048	6% (state)
Kansas	2 brackets, 5.20% and 5.58%	~$2,920	6.5% (state)
South Dakota	No income tax	$0	4.2% (state)

Iowa’s newly completed flat-tax transition puts it ahead of Nebraska at this income level, and Kansas actually charges more despite trimming its own brackets down to two. South Dakota wins outright on income tax, though its sales tax picks up some of the difference. Nebraska’s position in the middle of this pack is exactly where its ongoing rate cuts are aimed: closing the gap with lower-tax neighbors without eliminating the tax entirely.

Nebraska’s Tax Trade-Offs, Honestly

Category	Nebraska	National Picture
Income tax	Graduated, 2.46% to 4.55%, falling further through 2027	Below the national median top rate and improving
Sales tax	5.5% state, about 6.98% combined with local add-ons	Close to the national average
Property tax	Effective rate around 1.44%, among the highest in the country	Well above the national average
Estate/inheritance tax	Has an inheritance tax, one of a small number of states that still does	Most states have neither

Nebraska ranks 22nd overall on the Tax Foundation’s 2026 State Tax Competitiveness Index, an improvement driven mostly by the falling income tax rate. Property tax is the clear counterweight: a 2025 Tax Foundation analysis using 2023 data put Nebraska 4th highest in the nation for effective property tax burden, behind only Illinois, New Jersey, and Connecticut. Renters mostly sidestep that cost, but homeowners, and especially farmers with large land holdings, carry a real burden that the income tax cuts don’t offset.

Retirees: A Genuinely Good Change

Nebraska used to tax Social Security benefits like most other income, but that’s now fully in the past. Under LB 873, the state phased out the tax in stages, 40% exempt for 2022, rising each year until it hit a full 100% exemption starting with the 2025 tax year. Anyone collecting Social Security in 2026 pays no Nebraska state tax on those benefits at all, putting the state in line with the roughly forty other states that don’t touch Social Security income. That’s a meaningful shift for retirees weighing where to settle, especially paired with Nebraska’s ongoing income tax cuts on other retirement income like pensions and 401(k) withdrawals.

Federal Tax on a $70,000 Salary, Worked Out

Federal tax works the same regardless of state, and it’s usually the largest deduction on a paycheck, so it’s worth walking through. Take a single filer earning $70,000 in 2026.

1. Start with $70,000 gross income.
2. Subtract the 2026 federal standard deduction for single filers, $16,100. Taxable income: $53,900.
3. The first $12,400 is taxed at 10%: $1,240.
4. The next chunk, from $12,400 to $50,400, is taxed at 12%: $38,000 times 12% is $4,560.
5. The remaining $3,500 (from $50,400 to $53,900) falls in the 22% bracket: $770.
6. Total federal tax: $1,240 plus $4,560 plus $770 equals $6,570.

That’s an effective federal rate of about 9.4% on $70,000 gross, noticeably lower than the 22% marginal bracket the person’s last dollar of income falls into. Nebraska’s own tax runs its separate calculation off gross wages rather than this same taxable income figure, which is one of the small but real differences between how the two returns work.

Frequently Asked Questions

The Bottom Line

Nebraska is in the middle of genuinely shrinking its income tax bill year over year, and 2026 marks another real step down from where things stood even twelve months ago. What the state hasn’t fixed is property tax, which stays stubbornly near the top of the national rankings regardless of what happens on the income side. Anyone comparing Nebraska against a neighboring state should weigh both halves of that picture rather than looking at the income tax rate alone, since for homeowners the property tax bill can end up mattering more.