Nebraska Estate Taxes
Prior to 2007, Nebraska's estate tax was a "pick-up" tax equal to the state death tax credit under federal estate tax law. It has since been repealed. It now has a layered inheritance tax system, which was amended effective January 1, 2008. The amount of tax imposed depends on who gets what, according to the following classes of beneficiaries:
- Class 1: Transfers to a surviving spouse are entirely exempt from tax. Other members of this class include a decedent's parents, grandparents, siblings, children (adopted or biological), grandchildren (adopted or biological), any person to whom the decedent stood in acknowledged relation of a parent for at least 10 years prior to death, or the spouse or surviving spouse of any such persons. After a $40,000 per beneficiary exemption, transfers to members of this class are taxed according to the rates in the table below.
- Class 2: These beneficiaries include a decedent's uncle, aunt, niece, or nephew related to the deceased by blood or legal adoption, or any lineal descendant of the same. Each such beneficiary is allowed a $15,000 exemption, after which a transfer is taxed at the rates in the table below.
- Class 3: Any transfers that don't involve members of the above two classes are taxed according to the table below (after a $10,000 per beneficiary exemption). However, transfers involving charitable and educational bequests or a bequest to a political subdivision or government agency are completely tax free.
| Nebraska Inheritance Tax Rates (effective starting in 2008) |
| Value of Share in Excess of Exemption |
Class 1 Tax on Col. (1) |
Class 1 Rate on Excess |
Class 2 Tax on Col. (1) |
Class 2 Rate on Excess |
Class 3 Tax on Col. (1) |
Class 3 Rate on Excess |
| (1) |
(2) |
(3) |
(4) |
(5) |
(6) |
(7) |
(8) |
| $10,000 |
$15,000 |
$0 |
0% |
$0 |
0% |
$0 |
18% |
| $15,000 |
$40,000 |
$0 |
0% |
$0 |
13% |
$900 |
18% |
| $40,000 |
and up |
$0 |
1% |
$3,250 |
13% |
$5,400 |
18% |
Additional estate tax. Previously, Nebraska imposed an additional estate tax equal to the excess, if any, of the maximum credit allowed under the federal estate tax law over the aggregate of state inheritance taxes. Effective January 1, 2003, the additional estate tax was decoupled from the federal estate tax so that it would continue to be levied after the federal credit was phased out in 2005. However, the Nebraska estate tax was repealed in 2007.
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