Retiring in Nebraska: how your income is taxed
Nebraska is fairly tax-friendly for retirees. On a typical retirement income it ranks #41 of 51 for the lowest state income tax.
The rules in Nebraska
- Social Security: Social Security is fully exempt starting tax year 2024.
- Pensions: Private pensions and most public pensions are taxed as ordinary income. Federal CSRS annuities are exempt from 2024 (FERS annuities are not).
- 401(k), 403(b) and IRA withdrawals: 401(k) and IRA withdrawals are taxed as ordinary income at Nebraska's regular rates.
- At 65 and older: Filers 65 or older add $2,050 to the standard deduction for 2026 ($1,700 per spouse on a joint return).
Calculate your Nebraska retirement taxes
State income tax in Nebraska: $847 a year
In Nebraska, the 401(k)/IRA amount counts as IRA withdrawals, which don't qualify for the pension exclusion. Enter withdrawals from employer plans such as a 401(k) or 403(b) as pension.
In Nebraska you'd pay about $847 in state income tax and $4,336 in federal income tax on $70,000 of retirement income, keeping $64,817 (7.4% total).
Nebraska ranks #41 of 51 for the lowest state tax on this income. 19 states charge no state income tax on this income.
What retirees pay in Nebraska
| Retirement income | State tax (single) | State tax (married) | Federal tax (single) |
|---|---|---|---|
| $24,000 Social Security, $12,000 401(k)/IRA | $0 | $0 | $0 |
| $30,000 Social Security, $20,000 pension, $20,000 401(k)/IRA | $847 | $225 | $4,336 |
| $40,000 Social Security, $40,000 pension, $50,000 401(k)/IRA, $10,000 other income | $3,577 | $2,636 | $19,812 |
Age 67 or older, 2026 rules including the federal senior deduction. For married couples, income is the household total and both spouses are 67 or older. State estimates apply Nebraska's main exclusions and may differ for income-tested credits.
States with lower retirement taxes
Moving to Nebraska in retirement?
Compare the tax on your Social Security, pension and 401(k)/IRA income, and typical living costs, with the state you'd leave. These are the states most households moving to Nebraska come from (IRS migration data, 2022–2023).
- Iowa to Nebraska
- Texas to Nebraska
- Colorado to Nebraska
- California to Nebraska
- Florida to Nebraska
- Kansas to Nebraska
Frequently asked questions
Does Nebraska tax Social Security?
Not taxed. Social Security is fully exempt starting tax year 2024.
Does Nebraska tax pensions?
Taxed. Private pensions and most public pensions are taxed as ordinary income. Federal CSRS annuities are exempt from 2024 (FERS annuities are not).
Does Nebraska tax 401(k) and IRA withdrawals?
Taxed. 401(k) and IRA withdrawals are taxed as ordinary income at Nebraska's regular rates.
Is Nebraska a good state to retire for taxes?
For a single retiree with $30,000 Social Security, $20,000 pension, $20,000 401(k)/IRA, Nebraska charges about $847 in state income tax, ranking #41 of 51 (lowest tax first).
Related
Sources: revenue.nebraska.gov, revenue.nebraska.gov (2), nebraskalegislature.gov. Rules reviewed .