Nebraska State Income Tax Withholding Information

State Abbreviation:

NE

State Tax Withholding State Code:

31

Acceptable Exemption Form:

W-4

Basis for Withholding:

Federal Exemptions (S, M/Number of Allowances)

Acceptable Exemption Data:

Y00, N00

TSP Deferred:

Yes

Special Coding:

Determine 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.

Additional Information:

A State tax certificate is not required since Federal exemptions are used in the computation of the State formula. Y00 will be entered for employees who have provided proof that they are entitled to lower withholding than required by LB223.
Additional Resources: TAXES 13-15, Nebraska State Income Tax Withholding

Withholding Formula Begin Change(Effective Pay Period 06, 2013)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 26 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 = $1,900 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

    Begin Change$2,975

     

    $0

    plus

    0.00%

    $0

    2,975

    5,325

     

    0

    plus

    2.26%

    2,975

    5,325

    17,275

     

    53.11

    plus

    3.22%

    5,325

    17,275

    25,025

     

    437.90

    plus

    4.91%

    17,275

    25,025

    31,775

     

    818.43

    plus

    6.20%

    25,025

    31,775

    59,675

     

    1,236.93

    plus

    6.59%

    31,775

    59,675

    and over

     

    3,075.54

    plus

    6.95%

    59,675End 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$7,100

     

    $0

    plus

    0.00%

    $0

    7,100

    10,300

     

    0

    plus

    2.26%

    7,100

    10,300

    25,650

     

    72.32

    plus

    3.22%

    10,300

    25,650

    39,900

     

    566.59

    plus

    4.91%

    25,650

    39,900

    49,500

     

    1,266.27

    plus

    6.20%

    39,900

    49,500

    65,650

     

    1,861.47

    plus

    6.59%

    49,500

    65,650

    and over

     

    2,925.76

    plus

    6.95%

    65,650End 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 two (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 26 to obtain the biweekly Nebraska tax withholding.