Nebraska State Income Tax for LLCs — Rates & Filing
Nebraska's state income tax is the primary tax obligation for LLC members after federal taxes. Since Nebraska LLCs are pass-through entities by default, the LLC itself doesn't pay income tax — profits flow to members' individual Nebraska returns (Form 1040N). Under LB 754 (2022), Nebraska is actively reducing its income tax rates. For the complete tax picture, see our tax guide. For formation, see our LLC guide.
Nebraska Income Tax Rates (2025)
Individual rates (applying to LLC pass-through income):
| Taxable Income (Single) | Rate |
|---|---|
| $0 - $3,700 | 2.46% |
| $3,700 - $22,170 | 3.51% |
| $22,170 - $35,730 | 5.01% |
| Over $35,730 | 5.84% |
Married filing jointly:
| Taxable Income | Rate |
|---|---|
| $0 - $7,390 | 2.46% |
| $7,390 - $44,350 | 3.51% |
| $44,350 - $71,460 | 5.01% |
| Over $71,460 | 5.84% |
Rate reduction under LB 754: Nebraska's top rate was 6.84% before LB 754. The legislation phases it down over several years, with a target of approximately 3.99%. The 2025 rate of 5.84% represents significant savings compared to prior years.
How LLC Income Is Taxed
Single-member LLC:
- All income reported on federal Schedule C
- Flows to Nebraska Form 1040N
- Nebraska starts with federal AGI and applies state adjustments
Multi-member LLC:
- LLC files federal Form 1065, issues K-1s
- Each member reports their share on Nebraska Form 1040N
- Nebraska taxes each member on their Nebraska-source income
Non-resident members:
- Owe Nebraska tax on income from Nebraska business activities
- File Nebraska Form 1040N (non-resident version)
- May claim credit on home state return for Nebraska tax paid
Nebraska vs. Neighboring States
Ready to get started?
Get Started| State | Top Individual Rate | Notes |
|---|---|---|
| Nebraska | 5.84% (declining) | Actively reducing rates |
| Iowa | 5.7% (2025, reduced) | Also reducing rates |
| Kansas | 5.7% | Flat above $30K |
| Colorado | 4.4% | Flat rate |
| South Dakota | 0% | No income tax |
| Wyoming | 0% | No income tax |
| Missouri | 4.95% | Flat rate |
Nebraska's rate is moderate but declining, positioned between the no-income-tax states (SD, WY) and higher-tax states in the region.
Key Filing Details
| Item | Detail |
|---|---|
| Form | Nebraska 1040N (residents) |
| Due date | April 15 |
| Extension | October 15 (automatic with federal extension) |
| Payment | revenue.nebraska.gov (online) or mail |
| Estimated payments | Required if expecting $500+ in Nebraska tax |
| Safe harbor | 100% of prior year tax avoids penalties |
FAQ
Does my LLC file a separate Nebraska return?
Pass-through LLCs (default treatment): No separate entity return. Members file individually. If C-corp elected: LLC files Nebraska Form 1120N (corporate income/franchise tax return).
I live in Iowa but have a Nebraska LLC. Do I owe Nebraska tax?
Yes. Nebraska taxes income from Nebraska business activities regardless of where you live. File Nebraska 1040N (non-resident). You'll receive a credit on your Iowa return for Nebraska tax paid.
Are Nebraska's rates really going down?
Yes. LB 754 established a statutory schedule of rate reductions contingent on revenue growth. The top rate has already dropped from 6.84% to 5.84%, and further reductions are enacted through 2027.
Can I reduce my Nebraska tax with the S-corp election?
S-corp election does not change your Nebraska income tax rate — savings are on federal self-employment tax only. All income still flows to your Nebraska 1040N at the same rates (2.46%-5.84%).