Nebraska State Income Tax Withholding Information

State Abbreviation:

NE

State Tax Withholding State Code:

31

Acceptable Exemption Form:

Begin ChangeW-4End Change

Basis for Withholding:

Federal Exemptions / Begin Change(S, H, M/Number of Allowances)End Change

Acceptable Exemption Data:

Begin ChangeY00, N00End Change

TSP Deferred:

Yes

Special Coding:

Begin ChangeDetermine the Total Number of Allowances Claimed field as follows:
Y00 - Employee provides proof of number of exemptions claimed to receive the lower withholding percentage, if applicable.
N00 - Employee no longer wants to provide proof of number of exemptions claimed to receive the lower withholding percentage.End Change

Additional Information:

A State tax certificate is not required since Federal exemptions are used in the computation of the State formula. Begin ChangeY00 will be entered for employees who have provided proof that they are entitled to lower withholding than required by LB223.End Change
Additional Resources: TAXES 08-32, Nebraska State Income Tax Withholding

Withholding Formula Begin Change(Effective Pay Period 20, 2008)End Change

  1. Subtract the nontaxable biweekly Thrift Savings Plan contribution from the gross biweekly wages.
  2. Subtract the nontaxable biweekly Federal Health Benefits Plan payment(s) (includes dental and vision insurance program and Flexible Spending Account - health care and dependent care deductions) from the amount computed in step 1.
  3. Add taxable fringe benefits (i.e., taxable life insurance) to the adjusted gross biweekly wages.
  4. Multiply the adjusted gross biweekly wages times Begin Change27End Change to obtain the gross annual wages.
  5. Determine the exemption allowance by applying the following guidelines and subtract this amount from the results in step 4 to compute the taxable income.

    Exemption Allowance = Begin Change$1,700End Change x Number of Exemptions

  6. Apply the taxable income computed in step 5 to the following table to determine the Nebraska tax withholding.

    Tax Withholding Table

    Single or Head of Household

    If the Amount of
    Taxable Income Is:

    The Amount of Nebraska
    Tax Withholding Should Be:

    Over:

    But Not Over:

     

    Of Excess Over:

    $0

    $2,200

     

    $0

    plus

    0.00%

    $0

    2,200

    4,400

     

    0

    plus

    Begin Change2.35%

    2,200

    4,400

    15,500

     

    51.70

    plus

    3.27%

    4,400

    15,500

    22,750

     

    414.67

    plus

    5.02%

    15,500

    22,750

    29,000

     

    778.62

    plus

    6.20%

    22,750

    29,000

    55,000

     

    1,166.12

    plus

    6.59%

    29,000

    55,000

    and over

     

    2,879.52

    plus

    6.95%

    55,000End Change

    Married

    If the Amount of
    Taxable Income Is:

    The Amount of Nebraska
    Tax Withholding Should Be:

    Over:

    But Not Over:

     

    Of Excess Over:

    $0

    Begin Change$6,450

     

    $0

    plus

    0.00%

    $0

    6,450

    9,450

     

    0

    plus

    2.35%

    6,450

    9,450

    23,750

     

    70.50

    plus

    3.27%

    9,450

    23,750

    37,000

     

    538.11

    plus

    5.02%

    23,750

    37,000

    46,000

     

    1,203.26

    plus

    6.20%

    37,000

    46,000

    61,000

     

    1,761.26

    plus

    6.59%

    46,000

    61,000

    and over

     

    2,749.76

    plus

    6.95%

    61,000End Change
  7. If the employee is eligible for the lower withholding than required by Nebraska LB223, proceed to step 8. If the employee claims SINGLE and claims one (1) or fewer exemptions, proceed to step 8. If the employee claims MARRIED and claims two (2) or fewer exemptions, proceed to step 8. Otherwise, calculate the annual tax amount as required by LB223 as follows:
    1. Calculate the annual tax following step 1 through 6 except use one (1) exemption in step 5 for SINGLE filers and use 2 exemptions in step 5 for MARRIED filers.
    2. Multiply the annual tax by one-half (0.50) to get the annual minimum tax.
    3. If the annual minimum tax is greater than the annual tax based on exemptions claimed, then the annual tax amount is equal to the annual minimum tax. Otherwise, the annual tax amount is equal to the annual tax based on exemptions claimed.
  8. Divide the annual Nebraska tax withholding by Begin Change27End Change to obtain the biweekly Nebraska tax withholding.