Nebraska Small Business Taxes: The Employer’s 2023 Guide

Feli Oliveros

It takes more than a great idea to build a successful business. It requires knowledge of your customers, your employees, and—importantly—your finances. After all, lack of cash flow is one of the biggest reasons why new businesses fail. 

So if you want to start a business in Nebraska (or if you already have), understanding your state tax obligations will help keep your business running smoothly. In this guide, we’ll cover the following:

What business taxes do you have to pay in Nebraska?

Many new business owners get thrown off by the sheer amount they pay in business taxes. Sure, they might already expect to pay income taxes on the money their business brings in, but in Nebraska they’re also responsible for sales tax, withholding tax, unemployment tax, and sometimes industry-related or local taxes. 

Below, we’ll talk about the taxes most small businesses will pay in Nebraska, who’s required to pay them, as well as how to file and pay each tax. 

Nebraska personal income tax

Pass-through entities—like sole proprietorships, partnerships, and limited liability companies (LLCs)—typically don’t pay income taxes themselves. Instead, those taxes flow through to the personal tax returns of their owners, partners, and members.

The 2023 state income tax rate in Nebraska ranges from 2.46% to 6.64%.

How to file and pay

State individual tax returns (Form 1040-N) are due by the 15th day of the fourth month after the end of the fiscal year. For companies following the calendar year, this due date is April 15. Taxpayers can file their returns online via NebFile, or by mail to the appropriate address listed on the 1040-N tax form. 

Businesses that expect to owe $500 or more in taxes for the year must make estimated tax payments each quarter by April 15, June 15, September 15, and January 15. The Department of Revenue recommends making payment electronically, but if you prefer to file by mail, send your payment along with payment voucher Form 1040N-ES to the address below:

Nebraska Department of Revenue
PO Box 98911
Lincoln, NE 68509-8911

The state of Nebraska also requires all S corporations and partnerships that report income from Nebraska sources to file a separate state tax return (Form 1120-SN for S corporations and Form 1065N for partnerships). These returns must be filed with the Department of Revenue by the 15th day of the third month after the end of the fiscal year (or March 15 for calendar filers). File your returns electronically or mail them to the address below:

Nebraska Department of Revenue

PO Box 94818

Lincoln, NE 68509-4818

For more information on filing individual income tax returns, review this guide from the Nebraska Department of Revenue. Instructions on filing partnership and S corporation tax returns can also be found on the Department of Revenue website. 

Nebraska pass-through entity tax

Nebraska allows eligible partnerships, S corporations, and LLCs taxed as partnerships or S corporations to file business income taxes as a business entity (rather than passing those taxes on to their partners or shareholders). This tax is known as a pass-through entity tax (PTET). 

Businesses that make the PTET election are taxed at the highest individual tax rate, which is 6.64% in 2023. 

How to file and pay

To make the election for the tax year, pass-through entities must file Form PTET-E through the Department of Revenue’s secure file-sharing system. This document must be filed by the due date of the pass-through entity’s state return. 

To learn more about the Nebraska PTET, visit the Department of Revenue website

Nebraska corporate income tax

Corporations that incorporate or do business in Nebraska must pay a corporate income tax to the state. 

In 2023, Nebraska levies a 5.58% tax on taxable income below $100,000 and a 7.25% tax plus an additional $5,580 fee on taxable income over $100,000.

How to file and pay

Nebraska corporate income tax returns (Form 1120-N) are due by the 15th day of the fourth month after the end of the fiscal year. For businesses that follow the calendar year, this deadline is April 15. Note that corporations following a fiscal year ending on June 30 should file their tax returns by the 15th day of the third month after the end of the fiscal year (September 15).

Nebraska tax returns can be filed through the federal/state e-file program or by mail. If you decide to file by mail, send your return to the address below:

Nebraska Department of Revenue
PO Box 94818
Lincoln, NE 68509-4818

Corporations that expect to owe over $400 in taxes for the fiscal year are required to make quarterly estimated tax payments to the state. These payments are due by the 15th day of the fourth, sixth, ninth, and 12th months of the fiscal year. Make your tax payments online here or mail a check or money order (along with payment voucher Form 1120N-ES) to this address:

Nebraska Department of Revenue
PO Box 94818
Lincoln, NE 68509-4818

To learn more about filing Nebraska corporate income taxes, review these guidelines from the Department of Revenue

Sales tax

Companies that sell physical products or certain taxable services may be required to collect sales tax at the point of purchase and pay it to the Department of Revenue.

The 2023 state sales tax rate is 5.5%. 

How to file and pay

Register for a sales tax account with the Department of Revenue by visiting the NebFile for Business online portal. Once you’ve registered, you’ll be assigned a monthly, quarterly, or annual filing frequency based on your estimated sales tax liability. You can use the NebFile for Business system to file your sales tax returns as well. 

Tax returns (Form NE-10) are typically due by the 20th of the month after the tax period. The Department of Revenue recommends that businesses file electronically, but paper filers can mail their returns and any payment to the address below:

Nebraska Department of Revenue
PO Box 98923
Lincoln, NE 68509-8923

To learn more about the Nebraska sales tax, visit the Department of Revenue website

Withholding tax

Businesses that are located in or do business in Nebraska are required to withhold money from each employee’s paycheck and pay it to the state. These taxes are known as withholding taxes or employment taxes

Although the withholding tax rate differs between employees based on factors like their total income, the Nebraska tax rate in 2023 ranges from 2.26% and 6.75%, plus an additional flat fee. 

How to file and pay

If you’re required to withhold taxes from your employees, first you’ll need to register your business with the Department of Revenue’s NebFile for Business online portal. 

After you register your business for a withholding tax account, you’ll be assigned a filing frequency by the Department of Revenue. Most businesses file their withholding tax returns (Form 941N) quarterly, while some employers are authorized to file yearly. Quarterly filers must file their returns by the last day of the month after the end of each quarter. Yearly filers should file their returns by January 31 of the following year. 

All employers that don’t receive paper tax forms in the mail must file their returns electronically via NebFile for Business. Employers that have received a paper version of the tax form can mail their return and any payments to the address below: 

Nebraska Department of Revenue

PO Box 98915

Lincoln, NE 68509-8915

In addition to the withholding filing requirements, employers are required to make monthly income tax withholding deposits if the amount withheld from their employees exceeds $500 in the first or second months of the calendar quarter. These payments can be made through Nebraska’s e-pay system, or by mail using Form 501N

Finally, all employers need to file Form W-3N (along with state copies of Forms W-2, W-2G, and 1099) according to the instructions on the tax form by January 31. Employers with over 50 forms to report for the tax year must file their information returns electronically. 

Visit the Department of Revenue website if you’d like more information on the Nebraska withholding tax. 

Unemployment tax

Nebraska also mandates employers to pay state unemployment insurance taxes. The money from these taxes covers the unemployment benefits for eligible workers who leave the company. 

Most employers pay an unemployment tax rate that ranges from 0% to 5.4% of the first $9,000 of each employee’s wages. New construction employers pay a rate of 5.4%, while new non-construction employers pay 1.25%. For more details on Nebraska’s 2023 unemployment insurance tax rates, read this tax guide from the Department of Labor

How to file and pay

Before you can file and pay Nebraska unemployment taxes, you need to register your business for an unemployment tax account with the Department of Labor’s NEworks platform. 

Nebraska employers are required to file wage and contribution reports every quarter via NEworks. These reports are due—along with any tax payments—by April 30, July 31, October 31, and January 31. 

Learn more about the Nebraska unemployment tax by reading this employer’s guide from the Department of Labor

Other industry-related and local taxes

Some cities and counties in Nebraska impose their own local taxes on the businesses in their jurisdiction. For example, the state sets a maximum local sales tax rate of 2% for an average combined state and local sales tax rate of 6.95%. To find out the local sales tax rate for the municipality your business is located in, use the Nebraska sales tax finder

In addition to local taxes, you should also be aware of any industry-related taxes levied by the state on certain products, services, or business activities. So if your business sells alcoholic beverages, cigarettes, fuel, or any other taxable product or service, you may be required to pay a tax on them. 

Make sure to talk to your tax professional or accountant to determine your company’s specific tax obligations.

Nebraska business tax breakdown by business type

To help you keep track of your tax obligations, below we’ve included a chart breaking down the taxes each type of business entity is responsible for. Keep in mind that pass-through entities pay federal income taxes through the personal tax returns of their owners.  

Business typeIndividual income taxPass-through entity taxCorporate income taxSales taxWithholding taxUnemployment taxFederal income taxes
C corporationNo No Yes Yes, if applicableYes, if you hire employeesYes, if you hire employeesYes
S corporationDepends if it takes the PTE electionYes, if it takes the electionNo Yes, if applicableYes, if you hire employeesYes, if you hire employeesYes (pass-through)
LLCDepends on how it’s structured and if it takes the PTE electionDepends on how it’s structured and if it takes the electionDepends on how it’s structuredYes, if applicableYes, if you hire employeesYes, if you hire employeesYes (pass-through)
Partnership Depends if it takes the PTE electionYes, if it takes the electionNo Yes, if applicableYes, if you hire employeesYes, if you hire employeesYes (pass-through)
Sole proprietorshipYes No No Yes, if applicableYes, if you hire employeesYes, if you hire employeesYes, by way of individual income tax

File your Nebraska small business taxes with Gusto

Managing your state tax obligations can be a headache, but with Gusto’s automated payroll software, you’ll spend less time filing taxes and more time building your business. Create a Gusto account to see how it works. 

Feli Oliveros Feli Oliveros is a freelance finance and business writer with experience covering personal and small business finance. In 2015 she graduated from UCLA, where she earned her bachelor’s degree in English and minored in Anthropology.
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