Are you a Nebraska business owner? If so, it’s time to brush up on the state-run business tax programs available to you. Whether you’re a retail small business or a major manufacturing enterprise, there are credits and incentives you can qualify for. 

Keep reading for a complete list of Nebraska business tax programs. 

Nebraska business tax incentives and tax credits

ImagiNE Nebraska Tax Incentive Program

ImagiNE Nebraska is the state’s business tax incentive program for operations that start in, expand within, or relocate to Nebraska. Businesses of all types can qualify for one of the program’s eight application levels, each of which has its own requirements and tax benefits.

Eligible businesses can get tax credits against their state income liability and withholding liability or use the tax credits to refund sales and use tax, job training costs, recruitment costs, and employer-sponsored childcare costs. 

Credit amounts vary based on your business’s application level, investment amount, hiring, and location. Here’s the basic information per application type:

  1. Economic redevelopment area: These businesses need to hire five full-time equivalent employees, pay them at least 70% of the Nebraska average wage, and invest at least $250,000 in a business growth project. They’ll get a 6% credit on the wages they pay their new employees and a 4% credit on their investment amount. 
  2. Manufacturing growth and expansion: These businesses need to hire five full-time equivalent employees if in a rural area (10 if they’re in an urban area), pay them at least 70-75% of the Nebraska average wage, and invest at least $1 million in a business growth project. They’ll get a 4-6% credit on the wages they pay their new employees and a 4% credit on their investment amount. 
  3. Growth and expansion: These businesses need to hire ten full-time equivalent employees, pay them at least 90% of the Nebraska average wage, and invest at least $1 million in a business growth project. They’ll get a 4% credit on the wages they pay their new employees and a 4% credit on their investment amount. 
  4. Quality jobs: These businesses need to hire 20 full-time equivalent employees and pay them at least 100% of the Nebraska average wage. They’ll get a 5% credit on the wages they pay their new employees; the credit increases to 7% if the wages are 150% of the state average and 9% if the wages are 200% of the state average.  
  5. Quality jobs investment: These businesses need to hire 30 full-time equivalent employees, pay them at least 100% of the Nebraska average wage, and invest at least $5 million in a business growth project. They’ll get a 5% credit on the wages they pay their new employees; the credit increases to 7% if the wages are 150% of the state average and 9% if the wages are 200% of the state average. They’ll also get a 7% investment credit, a 100% sales and use tax refund, and a personal property tax exemption on ag processing and data center equipment. 
  6. Mega project: These businesses need to hire 250 full-time equivalent employees, pay them at least 150% of the Nebraska average wage, and invest at least $250 million in a business growth project. They’ll get a 7% credit on the wages they pay their new employees; the credit increases to 9% if the wages are 200% of the state average. They’ll also get a 7% investment credit and a 100% sales and use tax refund. 
  7. Modernization: These businesses need to invest at least $50 million in a business growth project and pay their employees at least 150% of the Nebraska state average wage. They’ll get a 100% sales and use tax refund and a personal property tax exemption on ag processing and data center equipment. 

You can apply for the ImagiNE program here or see a full breakdown of eligible activities and details here. 

Related: Here’s everything you need to know about hiring employees in Nebraska. 

Nebraska Advantage Microenterprise Tax Credit Act

The Nebraska Advantage Microenterprise Tax Credit Act gives a tax credit to microbusiness owners who can demonstrate that they’ve grown their business significantly over two years. The credit is equal to 20% of the increase in new investment or new employment at the microbusiness in the year of application and the year after, with a lifetime cap of $20,000 per business. 

To qualify, your business needs to have no more than five full-time equivalent employees at the time of application. For more information on how to calculate your investment or employment increase—and to apply for the program—visit this page. 

Learn how to start and grow a business in Nebraska.

Nebraska Biodiesel Tax Credit Act

The Nebraska Biodiesel Tax Credit Act rewards Nebraska retailers who sold biodiesel fuel—through a motor fuel pump—at their mobile retail motor fuel site. The credit amount is $0.14 for each gallon of biodiesel sold.

Claim the credit here. 

Nebraska Higher Blend Tax Credit Act

The Nebraska Higher Blend Tax Credit Act credits Nebraska retailers who sold and dispensed E-15, E-25, E-30, or E-85 higher blends at their retail motor fuel site. The credit amount is $0.05-08 a gallon, depending on the type of higher blend.

Calculate your credit amount here. 

Nebraska Advantage Research and Development Act Tax Credit

The Nebraska Advantage Research and Development Act Tax Credit gives eligible Nebraska businesses a credit for incurring research and experimental expenditures in the state. 

The credit is equal to 15% of eligible research and development (R&D) expenses and 35% of eligible expenses if the business conducts R&D activities on a college or university campus in Nebraska.  

As per the federal R&D tax credit, eligible research activities in Nebraska must be:

  • Be technological in nature; 
  • Used to improve the functionality, performance, reliability, or quality of a new or existing business component; 
  • Used to gather information that will help eliminate uncertainty around the development of a product; and 
  • Involve a process of experimentation, such as testing or modeling. 

Get answers to frequently asked questions about the Nebraska R&D tax credit here. 

Related: Tips on how to use the R&D credit

New Markets Job Growth Investment Act Tax Credit

Under the New Markets Job Growth Investment Act, businesses can get tax credits for investing in qualified community development entities (CDEs). Businesses can put the credits toward income tax, premium insurance tax, or franchise tax. 

The credit amount is equal to 7% of the investment amount—to be taken two years after the investment date. For years three through six after the investment date, the credit amount is 8%. 

Get general information on the New Markets Tax Credit here. 

Plus, get a complete breakdown of how Nebraska business taxes work. 

NextGen – Beginning Farmer Tax Credit Act

Nebraska’s NextGen program supports beginning farmers in getting started on a ranch and purchasing equipment. There are two types of groups eligible for the program:

  • Beginning farmers
  • Asset owners

Beginning farmers can get up to $500 in tax credits to cover a financial management class, as well as a personal property tax exemption on the farm equipment and machinery they use in production agriculture. To qualify as a beginning farmer, you need to have ranched for fewer than 10 of the last 15 years, have a net worth of less than $750,000, and complete a financial management course. 

Asset owners can get a refundable tax credit equal to 10% of the cash rent or 15% of the value of the sharecrop rent received each year for three years. To qualify as an asset owner, you need to be renting land or operations to a qualified beginning farmer. 

Get more information on NextGen and apply here. 

Renewable Chemical Production Tax Credit Act

The Renewable Chemical Production Tax Credit Act supports businesses that produce renewable chemicals in Nebraska. Renewable chemicals include biobased chemicals that can be a food, feed, fuel additives and supplements, vitamins, nutraceuticals, and pharmaceuticals. Eligible businesses can get up to $1.5 million in tax credits. 

To qualify, businesses must meet the below criteria:

  • Get certified by the Nebraska Department of Economic Development
  • Produce at least one million pounds of renewable chemicals in Nebraska during the calendar year
  • Be located in Nebraska
  • Have organized, expanded, or relocated to Nebraska on or after January 1, 2021

Learn more about the credit here.

Urban Redevelopment Act

The Urban Redevelopment Act is a tax incentive program designed to help small businesses in Nebraska grow. Eligible businesses in qualified locations—in certain Nebraska metropolitan areas or economic redevelopment areas—can get tax credits for meeting minimum investment and hiring thresholds. 

Businesses with a qualified location that invest $150,000 and hire at least five new full-time equivalent employees earning at least 70% of the Nebraska average hourly wage can earn:

  • A $3,000 tax credit for each new hire
  • An additional $1,000 for each new employee that lives in an economic redevelopment area
  • A tax credit of $2,750 for each $50,000 of cumulative investment

Businesses with a qualified location that invest at least $50,000 can earn a tax credit equal to 5% of the cumulative investment. The maximum credit a business can earn under the program is $50,000.

Apply for the program here.  

Nebraska Employer Tax Credit for Employing Convicted Felons

The Nebraska Employer Tax Credit for Employing Convicted Felons gives a tax credit to employers that hire someone who’s been convicted of a felony in Nebraska or any other state. The credit amount is equal to 10% of the wages the employer pays an employee during the tax year. 

The credit only counts on wages paid during the first 12 months of a new hire’s employment and has a maximum of $20,000. 

Learn how to claim the credit here.

Opportunity Scholarship Act

The Opportunity Scholarship Act gives tax credits to businesses that made cash contributions to 

A certified scholarship-granting organization (SGO) between January 1, 2024, and October 30, 2024. To qualify for the credit, your business needed to have notified the SGO of your intent to contribute and claim the tax credit. 

The credit amount is equal to the lesser of the following: 

  1. The total amount of the contributions made to the scholarship-granting organizations during the tax year;
  2. 50% of the income tax liability of the business for the year; or
  3. $100,000.

Get more information on the act here.

Pregnancy Help Act

The Pregnancy Help Act gives tax credits for years starting on or after January 1, 2025, to businesses that make cash contributions to pregnancy help organizations (PHOs) in Nebraska. These organizations must have been approved by the Department of Revenue (DOR) as an eligible charitable organization.

The credit amount equals the lesser of:

  1. The total amount of the contributions made to any approved PHO during the tax year; or
  2. 50% of the income tax liability of the business for the year. 

Find details on the Pregnancy Help Act here.

School Readiness Tax Credit Act

The School Readiness Tax Credit Act offers two separate tax credits related to childcare and child education programs. 

The first credit is available to businesses that owned or operated an eligible childcare and education program to serve children who participated in Nebraska’s childcare subsidy program. The credit amount is equal to the number of children under the age of five who participated in the program multiplied by a specific dollar amount: 

  • $400 for a Step One program;
  • $600 for a Step Two program;
  • $800 for a Step Three program;
  • $1,000 for a Step Four program; and
  • $1,200 for a Step Five program.

The second type of credit is available to individuals employed with eligible childcare programs or self-employed business owners providing childcare and early childhood education for an eligible program for at least six months of the year. 

These individuals can receive a tax credit equal to:

  • $2,300 for a Level One classification;
  • $2,600 for a Level Two classification;
  • $2,900 for a Level Three classification;
  • $3,200 for a Level Four classification; and
  • $3,500 for a Level Five classification.

Learn more about the School Readiness program here. 

Nebraska city and county tax credits

Business tax programs aren’t just state-wide—many cities and counties in Nebraska have their own business tax incentives and credits. Search the business or economic development section of your city’s website to see what’s available. 

Nebraska business financing opportunities

One of the perks of doing business in Nebraska is the state’s commitment to supporting businesses at every stage—with grants, loans, reimbursements, and practical resources. To explore the opportunities available to you, start by reading Gusto’s guide to business grants and loans in the Cornhusker State. 

Paige Smith Paige is a content marketing writer specializing in business, finance, and tech. She regularly writes for a number of B2B industry leaders, including fintech companies and small business lenders. See more of her work here:

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