Nebraska has a personal exemption credit, standard deduction

Recently enacted Nebraska legislation creates a personal exemption credit, establishes a Nebraska standard deduction, and adjusts personal income tax brackets based on the Consumer Price Index for All Urban Consumers (CPI-U).

Personal exemption credit.

A personal exemption credit is created, beginning with tax year 2018. The credit is multiplied by the total child credits and dependent credits taken on the federal income tax return, plus two for taxpayers filing a joint return or plus one for single/head of household returns. For tax year 2018, the credit amount is $134. The credit is available for individuals who cannot be claimed as a dependent on another taxpayer’s return.

Nebraska standard deduction.

For tax years beginning after 2017, a Nebraska standard deduction is established as follows:
Single — $ 6,750
Head of Household — $ 9,900
Married Filing Separately: — $ 6,750
Married Filing Jointly — $13,500
The additional amounts for age or blindness are $1,300 for married taxpayers and $1,600 for single or head-of-household taxpayers. [A previous story incorrectly stated the standard deduction for married filing separately taxpayers.]

Method of indexing for inflation.

For tax years beginning after 2017, the following will be indexed for inflation based on the Consumer Price Index for All Urban Consumers (CPI-U):

  • personal income tax brackets;
  • personal exemption credit; and
  • the standard deduction. (L.B. 1090 , Laws 2018, approved April 18, 2018, and effective three calendar months after adjournment, applicable as noted above; Office of Nebraska Governor Press release, Governor Ricketts Signs Tax Relief for Nebraskans on National Tax Day , April 18, 2018.)

Visit our News Library to read more news stories.