Nebraska Small Business Taxes: The Employer’s 2024 Guide

Nebraska offers a vibrant environment for business, with over 181,000 small businesses employing 48% of the state’s workforce. Whether you’re an established business owner or planning to start a new venture, understanding the tax landscape in Nebraska is crucial. This guide provides an overview of the various taxes small businesses in Nebraska must navigate, including tax rates, filing requirements, and deadlines.

Types of Business Taxes in Nebraska

Business owners in Nebraska may be subject to various taxes depending on their business structure, activities, and revenue. Here’s a breakdown of the main types of taxes:

1. Corporation Income Tax

   • Applicable Entities: C corporations and LLCs with C corp elections

   • Tax Rate: 5.58% (for taxable income not exceeding $100,000); $5,580 + 7.25% of the excess over $100,000 (for income exceeding $100,000)

   • Filing Requirements: File Form 1120N by the 15th day of the fourth month after the tax year ends.

   • Estimated Payments: Required if liability is $400 or more. Payments are due by the 15th day of the fourth, sixth, ninth, and 12th months of the tax year.

2. Pass-Through Entity (PTE) Tax

   • Applicable Entities: S corporations, partnerships, LLCs taxed as partnerships

   • Tax Rate: 5.84%

   • Filing Requirements: File Form 1120-SN (for S corporations) or Form 1065N (for partnerships) by the 15th day of the third month following the close of the tax year.

   • Estimated Payments: Required if liability is $400 or more. Payments are due by the 15th day of the fourth, sixth, ninth, and 12th months of the tax year.

3. Sales and Use Tax

   • Applicable Activities: Retail sales, certain services

   • Tax Rate: 5.5% (local rates may apply)

   • Filing Requirements: File Form 10 monthly, quarterly, or annually based on sales volume.

4. Withholding Tax

   • Applicable Entities: Employers with employees

   • Tax Rate: Varies

   • Filing Requirements: File quarterly returns (Form 941N) and payments by April 30, July 31, October 31, and December 31.

5. Unemployment Insurance Tax

   • Applicable Entities: Employers with employees

   • Tax Rate: Varies based on business’s experience rating

   • Wage Base: $9,000 per employee per year

   • Filing Requirements: File quarterly reports and make payments electronically by April 30, July 31, October 31, and December 31.

6. Personal Property Tax

   • Applicable Entities: Businesses using personal property

   • Tax Rate: Based on property type and value

   • Filing Requirements: Report annually to the county assessor by May 1.

7. Nonresident Withholding Tax

   • Applicable Entities: Pass-through entities with nonresident members

   • Tax Rate: 5.84% on distributive share income

   • Filing Requirements: File Form 1120-SN (for S corporations) or Form 1065N (for partnerships) by the 15th day of the third month following the close of the tax year.

How to File and Pay Nebraska Business Taxes

Business taxes in Nebraska can be filed and paid through various methods:

• Online Filing and Payment: Use NebFile for Business for electronic submissions and payments.

• Mail: Send forms and payments to the address indicated on the form (where applicable).

Important Deadlines

Keep track of these key dates to avoid penalties:

• Corporate Income Tax Returns: Due by the 15th day of the fourth month after the tax year ends.

• Estimated Tax Payments: Due by the 15th day of the fourth, sixth, ninth, and 12th months of the tax year.

• Sales and Use Tax Returns: Monthly, quarterly, or annual filing based on sales volume.

• Withholding Tax Returns: Due quarterly by April 30, July 31, October 31, and December 31.

• Unemployment Insurance Reports: Due quarterly by April 30, July 31, October 31, and December 31.

Tax Credits and Incentives

Nebraska offers several tax credits and incentives for small businesses, including:

• Nebraska Advantage Microenterprise Tax Credit: This credit is available to eligible businesses with five or fewer employees. It equals 20% of the increase in new investment or new employment at the microbusiness in the year of application and the year after application, up to $20,000.

• New Markets Job Growth Investment Credit: Available to businesses that invest in a qualified community development entity. The credit is 7% of the cash purchase price of the investment two years after the date of investment and 8% in the third through sixth years after the investment date.

• Nebraska Advantage Research and Development Tax Credit: Available to businesses that incur research and experimental expenditures in Nebraska. The credit equals 15% of the federal tax credit allowed or 35% for expenditures in research and experimental activities on the campus of a college or university in the state.

Check out our guide to tax incentives for your Nebraska businesses to learn more. 

Nebraska’s business tax breakdown by business type

Business taxes can get complicated, so below, we’ve included a chart that breaks down which taxes different business structures usually pay. 

Remember that pass-through entities don’t pay federal income taxes themselves—the obligation is passed on to their business owners or shareholders, who pay them through their personal income tax returns. 

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