State retirement taxes · 2026
Does Nebraska tax retirement income?
Short answer: Yes — everything except Social Security. Nebraska does not tax Social Security benefits. Only federal CSRS annuities and military pay are excluded; other pensions and IRAs are taxed.
What’s taxed in Nebraska
2026 rules.
- Social SecurityNot taxed
- Nebraska does not tax Social Security benefits.
- PensionsTaxed
- Private and state or local government pensions are taxable; federal CSRS annuities and military pay are exempt.
- IRA & 401(k) withdrawalsTaxed
- IRA and 401(k) withdrawals are fully taxable.
- Military retirement payNot taxed
- Military retirement pay is 100% excluded since 2022 (including Coast Guard, PHS and NOAA retirees).
- Income tax rate4.55% top
- Top rate 4.55% for 2026, down from 5.2% in 2025, and 3.99% from 2027 under current law.
Does Nebraska tax Social Security?
Nebraska does not tax Social Security benefits.
Since 2024, 100% of federally taxable Social Security is excluded, with no income limit and no age test.
Your federal return is a separate question — see how much of your benefit the IRS taxes with the taxable Social Security calculator.
Are pensions taxed in Nebraska?
Private and state or local government pensions are taxable; federal CSRS annuities and military pay are exempt.
From 2024, federal Civil Service Retirement System (CSRS) annuities can be deducted — FERS annuities cannot. Retired law enforcement officers and firefighters (20+ years of service, 60+) can deduct health insurance premiums. Railroad Retirement benefits are deductible.
Public vs. private pensions: Private and state/local pensions are taxed; federal CSRS annuities are exempt.
Are IRA and 401(k) withdrawals taxed in Nebraska?
IRA and 401(k) withdrawals are fully taxable.
Nebraska has no general or age-based retirement exclusion.
Required minimum distributions (RMDs) are IRA and 401(k) withdrawals, so the same rules apply. Estimate your RMD.
Is military retirement pay taxed in Nebraska?
Military retirement pay is 100% excluded since 2022 (including Coast Guard, PHS and NOAA retirees).
What is Nebraska’s income tax rate?
3 brackets, topping out at 4.55%.
Top rate 4.55% for 2026, down from 5.2% in 2025, and 3.99% from 2027 under current law. Draft 2026 brackets: 2.46% up to $4,130 single ($8,250 joint), 3.51% up to $24,760 ($49,530 joint), 4.55% above.
2026 brackets. Each rate applies to taxable income above the amount shown.
| Single | Married, joint | Rate |
|---|---|---|
| $0 | $0 | 2.46% |
| $4,130 | $8,250 | 3.51% |
| $24,760 | $49,530 | 4.55% |
2026 thresholds come from the Department of Revenue’s draft schedule (August 17, 2026) and are indexed.
Standard deduction and exemptions
2025 standard deduction: $8,600 single or married filing separately, $17,200 joint, $12,600 head of household; 65+ or blind adds $2,000 (single or head of household) or $1,650 per box (married). The 2026 draft form shows $8,850 / $17,700 / $12,950. Personal exemption credit: $171 for 2025 ($176 on the 2026 draft).
What tax breaks do seniors get in Nebraska?
The extra standard deduction at 65+ and the Nebraska credit for the elderly or disabled. Nebraska starts from federal AGI, so the federal $6,000 senior deduction does not carry over.
What changed for 2026?
LB 754 (2023) set the rate path: 5.2% (2025), 4.55% (2026), 3.99% (2027 on). The Social Security exclusion reached 100% in 2024. The 2026 session did not change rates, Social Security or military retirement. Final 2026 forms come later in the year.
Rates are set in law; 2026 brackets and standard deduction come from draft forms dated August 17, 2026.
What we couldn’t confirm
- Nebraska’s 2026 brackets and standard deduction come from draft forms and may change when finalized.
How Nebraska compares with its neighbors
Thinking of moving across the line? Here’s how each bordering state treats retirement income in 2026.
- NebraskaThis pageFriendlySocial Security Not taxedTop rate: 4.55% top
- ColoradoVery friendlySocial Security Partly taxedTop rate: 4.4% flat
- IowaVery friendlySocial Security Not taxedTop rate: 3.8% flat
- KansasFriendlySocial Security Not taxedTop rate: 5.58% top
- MissouriFriendlySocial Security Partly taxedTop rate: 4.7% top
- South DakotaTax-free retirement incomeSocial Security Not taxedTop rate: None
- WyomingTax-free retirement incomeSocial Security Not taxedTop rate: None
State tax is half the picture — check the federal side
Nebraska retirement tax questions
Is Nebraska tax-friendly for retirees?
We rate Nebraska “Friendly” for 2026. Nebraska does not tax Social Security benefits. Only federal CSRS annuities and military pay are excluded; other pensions and IRAs are taxed. The top income tax rate is 4.55%.
Are required minimum distributions (RMDs) taxed in Nebraska?
RMDs are withdrawals from IRAs and 401(k)-type plans, so they follow Nebraska’s rules for those accounts. IRA and 401(k) withdrawals are fully taxable.
Is military retirement pay taxed in Nebraska?
No. Military retirement pay is 100% excluded since 2022 (including Coast Guard, PHS and NOAA retirees).
What is Nebraska’s income tax rate for 2026?
Top rate 4.55% for 2026, down from 5.2% in 2025, and 3.99% from 2027 under current law. Draft 2026 brackets: 2.46% up to $4,130 single ($8,250 joint), 3.51% up to $24,760 ($49,530 joint), 4.55% above.
Sources for Nebraska
Primary sources only. We re-check them whenever an agency publishes new figures.
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