Taxes in Lincoln
Nebraska's real, current graduated individual income tax is actively phasing down (topping out at 4.55% for 2026, en route to a flat 3.99% in 2027) and the state now fully exempts ALL Social Security income -- genuinely favorable trends offset by a genuinely high property tax system, a real, honestly mixed overall tax picture this record discloses precisely.
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Learn moreNebraska's Real, Actively Falling Graduated Income Tax: 4.55% Top Rate for 2026
Nebraska applies a real, current 3-bracket graduated individual income tax for 2026 (down from 4 brackets in prior years): 2.46% on the first $4,130 (single filer; MFJ thresholds run exactly double at $8,260), 3.51% from $4,130-$24,760 (single) / $8,260-$49,520 (MFJ), and a top 4.55% rate above those thresholds. This reflects a real, legislated multi-year glide path under LB 754 (2023): the top rate ran 6.84% (2022) -> 6.64% (2023) -> 5.84% (2024) -> 5.20% (2025) -> 4.55% (2026), with a further scheduled drop to a single flat 3.99% rate for tax year 2027.
A Real, Significant, Genuinely Simple Social Security Exemption
Nebraska now fully exempts 100% of Social Security retirement, disability, and survivor benefit income from state income tax for ALL Nebraska taxpayers, with NO income test or phase-out threshold -- a real, genuinely significant, and genuinely simpler benefit than several other states' income-capped Social Security exemptions. LB 754 (2023) accelerated this exemption's phase-in to full effect beginning tax year 2024, a year ahead of Nebraska's earlier-legislated schedule.
Property Tax: Genuinely High, With a Real, Disclosed Cross-Source Spread
As detailed in full on the property-taxes topic page, Nebraska's statewide effective property-tax rate ran a real, disclosed approximately 1.29%-1.61% across sources reviewed, and Lancaster County (Lincoln)-specific citations ran approximately 1.38%-1.99% -- both well above a recurring ~0.90%-1.02% national comparison figure, even amid real, substantial 2026 state relief funding (a combined approximately $988 million).
Sales Tax Runs Moderate by National Standards
Lincoln's combined sales tax rate reached a real, current 7.25% as of this pass, combining Nebraska's 5.5% state rate and Lincoln's own 1.75% local rate -- moderate by national standards, though rates can vary slightly by ZIP code for special-district additions.
Weigh the Full Tax Picture, Not Just Income Tax Alone
Nebraska's genuinely falling, comparatively moderate income tax and full Social Security exemption are real, significant advantages -- but the state's genuinely high property tax burden meaningfully affects the total cost of homeownership specifically. Movers should model their own full, specific tax picture rather than anchoring to any single tax type alone.
Key takeaways
- Nebraska's real, current graduated income tax (2.46%-4.55% for 2026) is actively falling under a legislated schedule, reaching a flat 3.99% rate in 2027.
- Nebraska now fully exempts ALL Social Security income with no income test -- a real, significant, genuinely simple retiree benefit.
- Nebraska's property tax runs genuinely HIGH: statewide effective rates ran ~1.29%-1.61% and Lancaster County's own rate ran ~1.38%-1.99%, both well above the national comparison figure.
- Nebraska has real, substantial 2026 property-tax-relief funding in place (a combined ~$988 million), though this does not fully offset the genuinely high underlying rate.
- Model the full tax picture directly -- Nebraska's falling income tax and Social Security exemption are real advantages, but the state's high property tax meaningfully affects homeownership costs.
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